The British Irish Chamber of Commerce has rubbished suggestions that Ireland could benefit significantly from Brexit as foreign investors bypass the UK in favour of other EU destinations, such as Ireland.
“Yes, we’ll attract some foreign direct investment (FDI), it’s already happening but it’s no ace up our sleeves,” the chamber’s director general John McGrane said.
“The reality is, Britain will defend itself. If it is truly left alone and isolated, the easiest thing it can do is to give free accommodation to FDIs to come into the UK.”
Mr McGrane was speaking on the possible consequences for Ireland of Brexit at an event in the Institute of International and European Affairs (IIEA) in Dublin.
Several commentators have suggested that Ireland could benefit from a mass exodus of international firms based in the UK to access the EU market.
However, Mr McGrane said: “The set-up for the high-value end of financial services is not really aligned with what Dublin does.”
While the Irish capital may attract some operations, if there is a shift, the high-value ones were more likely to move to Frankfurt or Paris, he said.
Whatever benefit Ireland might derive “it won’t go anywhere near offsetting the much wider impact on the rest of the portfolio of Irish business interests that would be damaged by Brexit,” he said.
However, IIEA economist Dan O’Brien said the possible diversion of UK FDI here was “the solitary upside” of Brexit for Ireland.
Mr O'Brien said Britain had the largest stock of FDI in Europe and "even a small portion of that moving to Ireland" would have a significant impact.
Conversely, he suggested in the event of increased barriers to trade between the two countries companies based here may opt to shift their operations to the UK.
“So there’s a downside FDI threat as well in terms of existing FDI here moving to the UK to make sure they are behind whatever trade or tariff barriers that come into existance,” he said.
Mr O’Brien said the Ireland’s entire economic model was based on having full access to Europe’s single market.
So any threat to the integrity of the EU would be far more significant for Ireland that whatever deterioration in Anglo-Irish relations arises from Brexit, he added.