Public Policy Snippets, 15 July 2019

Jul 15, 2019

This week we take a look at the latest Brexit contingency plan released by the Irish Government to cope with a no deal Brexit which covers many areas but not where and how checks on the Northern Ireland border will take place. In other news, the European Commission also lowered growth estimates for the Eurozone area for 2020.

Where will the border checks be?

The Irish Government has assessed that there remains a significant risk of a no deal Brexit on or after 31 October and in response have released a contingency action plan which sets out the short-term risks associated with this outcome.  The plan also provides details of Government work to prepare for these risks.  A no-deal Brexit, according to the report, would be “highly disruptive” and have “profound economic and legal implications” for Ireland.

The document is over 100 pages long and covers a wide variety of sectors and issues including preparing ports and airports, financial services, taxation, aviation, the UK land-bridge, agri-food and fisheries, customs requirements, tourism and energy.

Specifically on the border with Northern Ireland, the report says “there should be no illusion – a no deal Brexit would result in far-reaching change on the island of Ireland.  This would particularly impact North-South trade, which could no longer be as frictionless as it is today.”  

While the report outlines ways in which traders can prepare for customs administration and tariffs, it doesn’t address where and how checks of goods would take place when crossing the Northern Ireland border into Ireland in the event of a no-deal.  The Government has been clear throughout the Brexit debate; it wants to avoid a hard order while retaining full membership of the EU single market. It’s difficult to know how this will be achieved given that EU law dictates that checks on some goods must be carried out when entering the EU market from a country outside the EU.   Businesses need this information and they need it urgently not least for supply chain management.   Cróna Clohisey called for clarity around the border in the Sunday Business Independent at the weekend.

The document is also light on services (aside from financial services) and doesn’t detail the impact of a no-deal Brexit on the cross-border recognition of professional qualifications.

Other Brexit bites:

  • The next nominee for President of the European Commission, Ursula von der Lyen, hints that Brexit might be delayed for a third time and she hopes it may not happen at all. But a fresh deal is not on the table.
  • Revenue will have 450 additional staff in place by 31 October to prepare for Brexit. This is in addition to the 400 staff already hired to April 2019.
  • If you are an Irish trader exporting to the EU and use a UK body to certify your products, you may need to take action according to the National Standards Authority.Read more.
  • Sterling fell sharply against the Euro to close to 90p in anticipation of the UK crashing out of the EU without a deal on 31 October.
  • Online shopping from companies in the UK could become more expensive with the addition of duties in the event of a no-deal Brexit.

European Commission warns of Irish economy overheating

The European Commission caveats forecasts of a steadily growing Irish economy with a potential risk of overheating.  Brexit and unpredictable multi-national corporation behaviours in the area of investment are said to be a few of the risk factors contributing to this.

In uncertain times: Eurozone growth estimates lowered

The European Commission also lowered estimates of Eurozone growth and inflation for 2020 amidst news of political uncertainty and trade war with the US. These estimates highlight reports of economic weakness in the region just two weeks before the European Central Bank’s next policy meeting. “The resilience of our economies is being tested,” said European Commission Vice President Valdis Dombrovskis.

Future jobs initiative in Ireland  

Last week, the Irish Government announced the development of a major new SME Policy as part of its Future Jobs Initiative.   The announcement came during an SME and entrepreneurship conference hosted by the Government in conjunction with the OECD. The conference was the result of an ongoing consultative process with the OECD which will feed into the new policy which is set to focus on things like encouraging female entrepreneurship and improving financial assistance for companies.  The policy will be released in October.

Read all our updates in our Public Policy webcentre.