Minister predicts crash out Brexit will lead to Irish economic shock

Michael D’Arcy says countries such as Ireland may require pan-EU financial support

Minister of State for Financial Services  Michael D’Arcy said the European Union has moved the Brexit date on a number of occasions and he did not see any more flexibility being offered.  Photograph: Alan Betson/The Irish Times.

Minister of State for Financial Services Michael D’Arcy said the European Union has moved the Brexit date on a number of occasions and he did not see any more flexibility being offered. Photograph: Alan Betson/The Irish Times.

 

The UK will leave the European Union in October without a divorce deal causing a severe economic shock that could leave countries such as Ireland requiring EU financial support, Minister of State Michael D’Arcy has predicted.

He said the European Union has moved the Brexit date on a number of occasions and he did not see any more flexibility being offered.

“The deal will be done after the 31st of October,” he said, referring to an agreement on the UK’s departure from the European Union.

“Some people in the UK have convinced themselves that no-deal is a good thing and that there are no circumstances that the European Union would allow the UK to crash out,” the Minister of State at the Department of Finance told Reuters.

British prime minister Boris Johnson has said he will take the UK out of the bloc on October 31st come what may, even without a transitional deal needed to pave the way for future relations with the EU.

Taking the UK out without a deal means there would be no formal arrangements to cover everything from post-Brexit pet passports to customs procedures on the Irish Border.

Any reworking of a deal to meet Mr Johnson’s demands would require Irish support. While the Taoiseach Leo Varadkar said on Tuesday that he believed a no-deal outcome was still avoidable, Mr D’Arcy struck a more sceptical tone, warning that a no-deal departure was very likely.

‘Badly wrong’

He said such a move would have a serious impact on the Irish economy as well as the European continent and that Dublin was now preparing itself.

“Could Brexit go badly wrong? Sure it could,” he said. “Ireland...is the country that will be impacted more than anybody else. Potentially, this could have a huge impact on the Irish economy.”

He said that financial support could be needed to buoy Ireland and other EU member countries affected by Brexit.

“It is important to show the solidarity from our European partners to a small nation in a time of difficulty. Financial support...potentially may be required for the continent,” he said, adding that how this would happen was yet to be decided.

“Support would be ... on an EU-wide basis rather than an individual country basis. The European budget is close to €270 billion per annum. So it would be part of that European budget.”

Earlier this year, the European Commission raised the prospect of funds for agriculture, one of the Irish industries expected to be worst hit by a hard Brexit.

“Additional support can be made available in the event of a no-deal scenario,” an EU official said, adding there was no scope for renegotiation, as Mr Johnson has demanded, of the divorce deal reached between his predecessor Theresa May and negotiators Brussels.

Mr D’Arcy said Ireland was well prepared and he did not expect it to have to apply for another international bailout, as Dublin did in the past when its banks were in crisis. - Reuters