Economy

More Brexit brinkmanship on the horizon for Irish business

Uncertainty likely to remain until shortly before the current Brexit date of October 31st

Many SMEs have yet to even undertake basic preparations for importing and exporting post-Brexit, despite constant urging from the Government.

Tue Jun 25 2019 - 05:55

Irish business is hoping against hope that we are not heading back into the same type of Brexit brinkmanship that we saw in March and early April. But that may be precisely where we are heading.

The current Brexit date is October 31st and there is every chance nothing will be decided before the European Council meeting on October 17th-18th.

It is quite possible this meeting could face a scenario were a new prime minister – probably Boris Johnson – is demanding the UK must leave on time, but may be seeking concessions, or may still be struggling to get support from the House of Commons for any course of action which Europe would sign up to.

This has left Irish businesses split into two groups – those who spent the money to prepare in April, and found that at least some of this was wasted, and those who took the chance of not preparing properly and got away with it. And we are not talking about trivial amounts of money.

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Companies spent significant amounts, for example, building up stock and finding warehouse space, either in Ireland or the UK, or both. Now they must decide whether to maintain high stock levels, keep their extra and expensive warehouses or what other option to pursue. Many SMEs have yet to even undertake basic preparations for importing and exporting post-Brexit, despite constant urging from the Government.

Now we may be facing down the barrel again. It may all be delayed. A UK general election, for example, perhaps in September, could persuade the EU leaders to give a new UK prime minister a bit more time. Some believe that even if nothing is agreed, the EU would still seek to delay a decision one more time, or at least put off a no-deal date for a few months to allow a bit more time for preparation.

For the moment, businesses are facing into the same uncertainty. And it is also not clear what the Government would offer in terms of short-term supports, or indeed what it can get clearance for from the European Commission. There has been some signals of support for farming and the beef sector, but beyond that a lot remains to be done.

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