Brexit Bulletin - 4 February 2019

Feb 04, 2019

 

This past week saw the UK do a U-turn on their commitment to the backstop; saying a hard border on the island of Ireland could be avoided using alternative arrangements. No details have been provided about what that means.  In other news, the economic impact of a disorderly Brexit looks particularly grim for Ireland with growth forecast to contract by 4.25 percent

The weekly round-up

In a busy week on the Brexit front, UK Prime Minister Theresa May won the support of her parliament last week for an attempt to go back to the EU and negotiate an alternative to the backstop.  No concrete details have been released as to what these alternative arrangements might be.

Taoiseach Leo Varadkar said that the UK’s U-turn on the backstop has only “reinforced” the need for the backstop.

And the EU weren’t happy either reportedly saying  politicians in Westminster would be disappointed if they think the EU will drop the backstop.

UK foreign secretary, Jeremy Hunt tells BBC radio that the UK government might need extra time to prepare to leave the EU if a deal is agreed with the EU at the eleventh hour and key legislation needs to be put in place.

Minister Donohoe outlines initial assessment of economic and fiscal impact of ‘no deal’ Brexit

Minister for Finance and Public Expenditure & Reform, Paschal Donohoe discussed the economic and fiscal impacts of a disorderly exit of the UK from the EU stating that all forms of UK exit will have a detrimental impact on the Irish economy.  The Minister said that:

  • Under a disorderly exit of the UK from the EU, the Irish economy could be 4¼ percent smaller than the current projections over the medium-term;
  • Employment would increase more slowly and the unemployment rate could rise by 2 percentage points;
  • The public finances would deteriorate – the modest surplus projected for 2020 would turn to deficit, and
  • The most adverse impacts likely to be felt in agri-food and indigenous manufacturing sectors.

The Minister said that no matter what form the UK will take to exit the EU, it will have a “detrimental” impact on the Irish economy.  The most adverse effects will be felt in agri-food and indigenous manufacturing sectors.

Read the Minister’s statement.