A British departure from the EU would “force down the value of sterling by 15 per cent” and have a “crippling effect” on Irish firms trading with the UK, an economic report by an Irish employers’ organization has warned.
Ibec made the claim that sterling may end up losing as much as 15 per cent of its value at the weekend. Such a devaluation would make Irish products exported to Britain would be uncompetitively and could cut UK-Irish by as much as a fifth, it claimed.
Ibec director of EU and international affairs Pat Ivory said: “The size and economic scale of the UK means the stakes are very high, not just for the UK but for Ireland and the rest of Europe
“A UK departure would be a blow to the Irish recovery and result in a protracted period of uncertainty for business. It would undermine Europe’s ability to act collectively and decisively in the world and could push the EU back into a dangerous period of crisis management.
“The UK and Ireland have been close allies in Europe across a wide range of areas. An EU without the UK would be a lesser union,” he added.
The food and agriculture sector in particular would suffer a huge blow, it said, as the UK accounts for 55 per cent of Ireland’s meat exports and 30 per cent of its dairy exports.
Ibec Chief Executive chief executive Danny McCoy even raised the possibility that Ireland might be forced to follow the UK out if a Brexit happened – a scenario vehemently denied by the Irish government. The ESRI said last year said Brexit would cut Irish- UK trade by a fifth and it would be extremely difficult to replace that lost trade.
“Many of our members feel the EU needs a lot of work. A lot of that has to do with the single market and the fact that there are lots of goods and services that can’t trade freely at all,” he said.
The Ibec report suggested Ireland could benefit from some foreign direct investment moving from London to Dublin but Britain’s freedom from EU regulation and oversight could give it an advantage with some clients.
It also warned that the damaging economic effect of Brexit and the risk of investment flight would likely make the UK aggressively improve their foreign direct investment offering.