Cliff Taylor: Ireland could face choice of backstop concessions or no-deal Brexit
Taoiseach Leo Varadkar faces ultimate political call on Brexit
There are times in Irish political life when pointing out the blindingly obvious is discouraged. Those of you old enough will remember the debate during the currency crisis in 1992-1993, when even suggesting that the currency might need to be devalued were treated as a treason against the “green-jersey agenda”.
And then there was the run-up to the 2010 bailout, when then ministers Noel Dempsey and Dermot Ahern appeared in their famous double act of denial, shortly before the European Union and International Monetary Fund were formally invited in.
Now we seem to be back there again. The statement this week by European Commission spokesman Margaritis Schinas that it was “pretty obvious” that Ireland would need a hard border with the UK in a no-deal Brexit merely repeats something which has been clear for a long time.
Perhaps, like the listeners tuned in to RTÉ’s Morning Ireland last Wednesday hearing Minister for Agriculture Michael Creed repeatedly refuse to answer about plans for the border in the event of a no-deal Brexit, the commission is getting a bit fed up with Ireland’s refusal to plan for this eventuality.
A wide range of outcomes could still come from the House of Commons debates, including a delayed Brexit or even a second referendum or general election
But saying it has set off a series of unfortunate events, with Ireland caught in the headlights.
This could end in Taoiseach Leo Varadkar facing the ultimate call on Brexit: give some ground on the backstop or face a no-deal Brexit with all the economic and political disruption this would bring.
We are not there yet, and events could move in another direction.But this week has illustrated starkly just what is at stake.
The fallout from the commission’s intervention has been troublesome. The Irish Government has been smoked out and looks uncertain.
On the one hand, Varadkar says in Davos that personnel and infrastructure would be needed on a hard Irish Border. On the other hand, the Government continues to insist that it has no contingency plans to arrange these.The noises from Brussels are also confusing.
Its chief Brexit negotiator, Michel Barnier, said this week that controls and checks would be needed, but that the commission would do all it could to avoid a hard border.
This has been manna to the hard Brexit lobby, encouraging their crazy arguments that a hard border can somehow be avoided if nobody bothers to put one up.
In fact, Barnier was probably talking about minimising actual physical checks rather than abolishing them. Because in some areas – particularly food and livestock – a physical presence at or near the Border is the only option. How else do you control smuggling? How else do you take a cow’s temperature or take some of its blood for testing?
A wide range of outcomes could still come from the House of Commons debates, including a delayed Brexit or even a second referendum or general election. For the moment, Theresa May is trying to get the DUP and the hard Brexit lobby in her own party on board (we might note the two groups have different viewpoints, which may yet prove significant) and looks set to seek changes to the backstop, perhaps involving some time limit on its operation.
Ireland and the EU have consistently argued that any such time limit would effectively mean the backstop was not an enduring guarantee.
Will the EU consider a UK request on the backstop? Might the Taoiseach face the big question? Would we accept some change to the backstop, or say “no” in the willingness of accepting a no-deal Brexit?
Irish politics will nervously watch as the House of Commons tries to find a way forward
It could happen, though it is not clear where the middle ground might lie in what is essentially a black-and-white question. And given the difficult numbers for May in the Commons, a deal which the EU and Ireland could live with on one side and which would get enough MPs to support the agreement on the other may simply not exist.
The huge stakes at play for Ireland were underlined by the Central Bank, which warned this week that a no-deal Brexit would cost Ireland 4 per cent of GDP in the first year – an €8 billion economic hit including huge disruption. The speed at which it said a no-deal Brexit would hit was particularly notable and it is the first time an Irish official body has done this.
There is a big difference between losing 4 per cent of GDP over 5 years, as the Department of Finance calculated in the case of a softer Brexit, or 4 per cent in one year. One is a nuisance, the other would cost a lot of jobs and likely lead to a supplementary budget.
Plunged into a no-deal scenario, the choices would be stark . Here is the second point where the Taoiseach would face a really big dilemma. The EU will insist that checks and controls are in place on goods entering from the UK.
If we don’t do them, then sooner or later the EU might well say they must take place at continental ports and airports, moving us at least halfway out of the EU trading bloc.
Economically this would be a disaster, putting new barriers up to our biggest market and blowing a big hole in our marketing programme for inward US investment. Where do we fall if we face this choice between peace and profits?
Because this would be so explosive, the Government has been arguing that in the event of a no-deal Brexit there would be pressure on the UK to ensure regulatory alignment North and South to help avoid a hard border.
The UK promised this in the agreement in December 2017, the Government here has pointed out, and have obligations under the Belfast Agreement. This would be a step back to something like the originally proposed Northern Ireland-only backstop. But the DUP would hate this – seeing it as a step towards a united Ireland economy separated from the rest of the UK.
After all this perceived economic separation is their core objection to the withdrawal agreement. So it is hard to see this being a runner in the immediate wake of a contentious no-deal Brexit.
Perhaps the backstop plan might re-emerge if subsequent talks took place to try to get things back on track, but how things would play out after a crash-out Brexit is anyone’s guess.
Irish politics will thus nervously watch as the House of Commons tries to find a way forward. It has been a tough week for the Government, but it may just be a foretaste of what is to come, unless British politics can somehow find a way to draw back from the brink.