Stormy winds on Emerald Island. Ireland braces for #Brexit. No-deal or backstop concessions?

As discussions continue to intensify in the EU some weeks before the official Brexit date, the situation in Ireland is by far more tensioned before another vote in the Commons in UK today. The headlines vary between the controversy caused by Taoiseach Leo Varadkar’s warning that a hard border would need a “police or army presence” and the Central Bank’s statement that a no-deal Brexit would mean that the GDP will go down by 4% in the first year after.

The Prime-Minister’s declarations at Davos – at the World Economic Forum – were viewed by many analysts as a sign of panic in the Government in the event of a no-deal Brexit. This just because it came after months of refusals to answer direct questions on the impact of a hard Brexit. And after the boom that came out of nowhere, we had another statement from the Government: there are no official preparations being made in such an event.

But nothing is clear even though the spring should bring – as voted – the UK out of the EU and the end of disputed over commercial agreements. We could expect another referendum or a delayed Brexit, Tuesday could bring changes to the backstop after discussions in the Commons, everything is possible just like in Schrödinger’s Cat theory. Also everyone remembers the problems between the north and the south parts of the island and the Good friday agreement.

A no-deal would mean loses in the GDP, jobs and investments and also frontier checks for goods coming from the UK, from food, packaged goods, fuel or animals. This as the figures show that Britain accounts for 24% of the total or 19 billion euros. Irish Times quotes official data that says that this value is 3 million over the one of the exports in 2017.

What do we import?

Imports of food and beverages – €4 billion

Imports of machinery and transport equipment – €3.2 billion

Imports of petroleum products – €2.7 billion

Imports of medical and pharmaceutical products – €3.1 billion

Regarding the future, while some retailers stock their products, the Irish Prime-Minister said that maybe some of the packaged goods will suffer in the event of no-deal Brexit.

But bear in mind also that without a Free Trade Agreement with the EU, Britain would have tariffs on imported food and viceversa. And by reading the figures from the Ministry of Agriculture in this contextwe see the Irish farmers and the industry will have to find new markets as soon as possible:

  • Almost 50% of Irish beef exports go to UK,
  • About  22% of dairy exports go to the UK, of which:
    • 41% is cheese and  26% is butter;
    • Cheddar is the largest dairy export to the UK – 47% (81k tonnes) of Irish cheddar cheese is exported to the UK.
  • 99% of mushroom and 71% forestry products and more than 62% of prepared consumer foods are exported to the UK.

Also, a KPMG report from last year calculated that “one day of delay for a lorry because of increased checks will easily cost a business €600 up to €1,000”.

Today House of Commons will debate on the Government’s EU withdrawal deal and we will see what the cat will bring.

Already the British prime minister Theresa May has told Conservative MPs she will seek to replace the Northern Ireland backstop with alternative arrangements to prevent a hard border, according to British media.

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