The political difficulty for Leo Varadkar and Simon Coveney as they head into the crunch period in the Brexit talks is that there will be no wins for Ireland – it is all about avoiding losses, or more accurately minimising them. The Brexit talks – for all sides – are a game of damage limitation which makes the politics of it all quite toxic. Negotiations are much easier when there are spoils to be shared out.
Ireland’s position, however, is uniquely tricky. We face the crunch political issue of the Irish Border, where the talks are now being pushed into recognising the real problems. Meanwhile, the UK is by far the biggest trading partner for Irish indigenous industry and we have a vital national interest in a trade deal being done between the UK and the EU, and also in an agreement on a long transition period after the UK leaves the EU.
This is all about damage limitation for Ireland. Sure, we will get some new banking and insurance investment and perhaps some other positive spin-offs, but these are dwarfed by the political and economic threats, particularly to the food industry, farming, SMEs and rural Ireland, notably the Border counties. Over the years, Irish ministers got used to arriving back from Brussels with cash for farmers or local rural projects, but Brexit risks pushing that part of the country and the economy into a dangerous reversal.
Just to make things even more complicated, we are going to have to juggle our priorities in the next few weeks. It is clear that Ireland wants to use its leverage to get as much progress as possible on the Border, before giving the nod that it believes the talks should move on to the next phrase. But it is also very much in Ireland’s interests that the trade talks do get under way.
Irish issues are one of a group of three on which progress is needed – the others are Britain’s financial commitments, and the mutual rights of EU and UK citizens. And as this decision to move to the next phrase requires consensus at the European Council, everyone will know that Ireland has some leverage.
It seems reasonable to use this leverage, certainly to get what Barnier called at Friday’s press conference a “common reading” of the issues relating to Ireland and the kind of things which might solve it. The UK approach has been contradictory, to be charitable, claiming that the UK could leave the single market and the customs union while still avoiding the return of a hard Border on the island.
Ireland will be encouraged by the European Commission negotiating paper leaked this week, which calls out this contradiction clearly. It says that one way around this is for the North to remain subject to the rules and regulations of the EU single market and customs union – in other words for it to have a kind of special status after Brexit. This could avoid a trade Border on the island of Ireland but mean one would be needed in the Irish Sea to control goods moving between Britain and the North. This was quickly and predictably ruled out, however, by UK Brexit secretary David Davis and by the DUP.
A big call for Ireland is what level of progress to look for in the coming weeks. While the European Commission’s intervention was helpful, Barnier did talk about avoiding a “hard Border” – rather than any border. The UK has also argued that things could be done to limit the impact of a new border. And Jeffrey Donaldson of the DUP told RTÉ on Friday that “Of course there will have to be some checks, but they don’t have to stop traffic at the Border to carry out checks on every truck.”
The UK and EU would both like to help on the Border, no doubt, but it is not at the very top of their agendas. So there is a real danger here of a squeeze coming on Ireland on the Border issue.
And we need the other parts of the agenda to progress, too. If Britain does leave the EU trading bloc , we need a new agreement to allow trade to continue in as free a manner as possible – and for a transition period between Britain leaving the EU and this new trade deal being finalised.
If a deal is not reached next month to allow the talks to progress, then the whole thing is going to start getting even edgier. Businesses here are already facing huge uncertainty and this will ramp up. Some industries, notably dairy and the beef industry, will face massive problems in the event of a hard Brexit and the whole economy faces a nasty shock.
It is a lose-lose nightmare for the Government. At risk are years of work on the situation in the North and significant sectors of the economy. No pressure so. The ideal solution for us, short of a Brexit reversal, is for Britain to stay in the EU trading bloc, but this has been repeatedly ruled out.
The Government again called this week on businesses to be Brexit-ready. But there is a real feeling that neither businesses nor the Government – none of us, in fact – are really ready if this does all go horribly wrong and we head for a hard and possibly sudden Brexit. Unless there is a big push forward in the next few weeks, we need to quickly move up our preparations for this all ending badly.
This is not some theoretical Y2K threat which might end up being not so bad. This will either hurt a bit or hurt a lot. A hard political message to sell, for sure, but what can you do?