Worst case Brexit scenario could see Irish GDP fall by 9%, says EU report
A new study into the effects of Brexit on UK and EU trade, particularly agricultural trade, warns that Ireland’s GDP could be harder hit than the UK.
Its main scenario analysis, based on a hard Brexit, foresees a fall in Irish GDP of 3.4 per cent, compared to a fall of 2.4 per cent in the UK. This is broadly in line with the predictions of other recent studies.
The report predicts that Irish agricultural exports to the rest of the world could fall by more than two thirds (71 per cent, or $6.5 billion).
The Brexit effect on the GDP of the whole of the EU27 would be of the order of only minus 0.3 per cent. The report, “EU-UK agricultural trade: State of play and possible impacts of Brexit”, was written by economists for the European Parliament’s agriculture committee.
The report even suggests the fall in Irish GDP could be as high as 9.4 per cent in the most malign scenario studied, if “non-tariff mechanisms” combine with new World Trade Organisation (WTO) tariffs to hamper Irish agricultural exports gain access to the rest of the EU and world.
I am unclear why the report expects Irish exports to the rest of the world to be so dramatically impacted by Brexit. The report attributes this to the dependency of Irish food exports on on UK “intermediaries” such as animal feedstuffs or fertilisers. However most of these can probably sourced elsewhere and some Irish exports to the EU 27 may be able to replace UK exports to the EU27 if these are hit by very high WTO tariffs.
Ireland’s dependency on the UK market has been declining steadily in any case, from c. 70% of total exports at the time of EU accession in 1973 to c. 14% now. However the Irish agri-food sector is still very dependent on the UK market (40% of Irish food exports go to the UK) and is already being hard hit by sterling devaluation. Overall the report predicts EU UK Agri-food trade to decline by 62%.
Meanwhile, in other news, Michael Bloomberg has called Brexit the `single stupidest thing any country has ever done’ until the USA Trumped them. Mr. Bloomberg appears to be feeling rather foolish for opening a large and expensive new European headquarters for Bloomberg in the City at a time when some of his staff are asking to be moved from the UK because they no longer feel welcome in the UK.
The Frankfurter Allgemeine Sonntagszeitung also has the now usual leak after a May Juncker dinner meeting:
The FAZ report claimed an exhausted-looking Ms May feared being toppled by enemies at home, that she had no room for manoeuvre and told Mr Juncker she was desperate for help from the European side of the Brexit negotiations.
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In the account of the most recent dinner, Ms May was said to have “begged for help”, and seemed “anxious” and “tormented” as well as “despondent and discouraged”.
The dinner last Monday was arranged at the last minute, according to the account, in spite of Downing Street’s insistence it had been in the diary for weeks as part of preparations for last week’s Brussels summit.
“Juncker found her anxious, despondent and disheartened. A woman who barely trusts anyone but also is unable to make a clean break,” reads the account, which is largely written from Mr Juncker’s perspective.
“May’s facial expression and her demeanour spoke volumes. That’s the way Juncker later described her to his colleagues. Everyone can see: the prime minister is marked by the struggle with her own party. She has deep rings under her eyes. She looks like someone who doesn’t sleep at night.”
The leak has provoked the now usual claims and counter claims about who leaked what to whom with former co-chief of staff for Theresa May, Nick Timothy, accusing the European Commission president’s powerful chief of staff, Martin Selmayr, of responsibility for the leak and attempting to undermine Mrs May.
I can now reveal exclusively here that I was responsible for the leak. I wasn’t invited to the dinner but it doesn’t take much imagination to make up the details based on the body language Theresa May displays in public. The fact that the veracity of the leaks has been so furiously denied more or less proves that I was right in the first place.
I actually have a good deal of sympathy for May’s predicament. She is so clearly in above her head and floundering desperately to keep afloat as the Brexiteer sharks circle her scenting blood. The fact that she actively sought the job limits my sympathy somewhat but she is not the first or last politician whose ambition exceeded their abilities.
She is now part of a process without an escape hatch but which at least has a defined end date: April Fools Day 2019. I suspect she is counting down the days. There is probably nothing much she can do to turn the ship of state around, even if she wanted to, and so there is nothing for it but to maintain a stiff upper lip, keep calm, and carry on.
