Brian Hayes: Ireland needs to prepare a plan for Brexit

Not enough is being done to prepare for the worst in the event of a No vote in the British referendum on EU membership, according to Dublin MEP Brian Hayes.

He said the Government needs to put in place a proper contingency plan for the real prospect of a No vote as Ireland would require a new agreement with both the EU and the United Kingdom if that happens.

"I am not convinced that there is enough contingency planning being done at government level on the Brexit referendum. There is an urgent need to put in place a stable government to prepare for the real prospect of Britain leaving the EU," Mr Hayes told Association of European Journalists in Dublin today.

“We joined with the UK because we couldn’t have joined without them. The question must now be asked honestly; were they to leave now, could we stay in the EU without them?”

He said this was not some academic question and it would have to be faced in a post-Brexit environment.

“I’m satisfied that we could and should remain in the EU without Britain. I’m satisfied that it’s in Ireland’s national interest to remain. But most definitely we would need a new agreement with the EU, post-Brexit. We would also need a new agreement with the UK,” he said.

Mr Hayes said that failure to prepare adequately for such an eventuality would be a 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.

“A British decision to leave the EU will be a profoundly disruptive economic and political event – for the EU, for Britain and for Ireland. We urgently need to prepare for that outcome,” he said.

Mr Hayes added that Ireland’s decision to join the Eurozone without Britain had left us vulnerable to negative currency fluctuations involving our single most important trading partner.

“The immediate danger to Ireland is the euro/sterling exchange rate. The very favourable exchange rate in recent years has been an important element in Ireland’s economic recovery.”

He said currency traders were predicting parity between sterling and the euro by the end of this year if Brexit happened and that would have extremely negative consequences for Irish exports to Britain.

The competitiveness of the important tourist sector would also be hit badly by a big fall in the value of sterling as the British segment accounts for 40 per cent of the Irish tourist market.

“After more than 40 years a member, divorce proceedings between Britain and the EU will be protracted, complex and very messy. We must not allow Ireland to be a victim of the separation negotiations that would follow.

“In effect Ireland will require a new agreement with both the EU and Britain in key areas, so as to ensure that we are not disadvantaged. That will be very difficult to envisage, but we badly need to think about what that deal might be and what red line issues we require.”

He said that at this stage there were at least six serious issues. The first was our €35 billion trade with the UK. How could we allow Europe to impose new restrictions on our trade where Britain is no longer governed by such restriction?

There were also issues with financial services, border controls, energy, climate change regulations and peace funding.