Fine Gael MEP Brian Hayes has said he is not convinced the Government is engaged in "any serious contingency planning" for the prospect of a British exit from the European Union (EU).
British voters will go to the polls on June 23rd for a referendum on whether Britain should remain in the EU. Mr Hayes, who was elected to the European Parliament in 2014, said the Republic "urgently needs to prepare" for the possibility of an exit.
In a speech to the Association of European Journalists in Dublin on Friday, Mr Hayes said the Government needs to put in place a “proper contingency plan”.
“I am not convinced that there is enough contingency planning being done at Government level on the Brexit referendum,” he said.
In the event of a Brexit, he said new agreements would have to be signed with the EU and the UK in key areas so as to ensure the Republic is not disadvantaged.
He said there were six "red line issues": trade, financial services, energy, climate change, the peace funding package for Northern Ireland, and border controls, which he added "simply cannot be allowed to happen".
“I’m satisfied that we could and should remain in the EU without Britain,” he said. “But most definitely we would need a new agreement with the EU, post-Brexit. We would also need a new agreement with the UK.
“Failure to prepare adequately for such an eventuality would be serious dereliction of duty by all Irish politicians. There is a real danger that the present protracted negotiations on the formation of a government are distracting attention from the bigger danger ahead.”
He also said a British decision to leave the EU would be a “profoundly disruptive” economic and political event.
“The immediate danger to Ireland is the euro/sterling exchange rate,” he said. “The very favourable exchange rate in recent years has been an important element in the Ireland’s economic recovery.
“If Britain decides to leave the EU currency traders are predicting parity between the sterling and euro by the end of this year. Should this happen there would be extremely negative consequences for Irish exports to Britain.”
After more than 40 years in the EU, a split by Britain would be “protracted, complex and very messy”.
“I raise these issues not to provoke fear but simply to start a genuine debate about what we need from all of this,” he said. “We are told that contingency plans are in place.
“Frankly, I’m not convinced that any serious contingency planning is underway. Nor do I believe that we have a plan for the potential negotiation. We need a strategy post-Brexit and the sooner that happens the better.
“The truth is that the risks associated with a protracted Brexit negotiation are immense for Ireland.”
