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10 styczeń 2017

The implications of Brexit for the Republic of Ireland

 In no other country one waited for the results of British referendum with bigger anxiety than in the Republic of Ireland. And in no other country the information about the end of membership of the United Kingdom in the European Union launched so widespread discussion about the future of bilateral relations. How will Brexit influence the Irish economy? Is it the end of the open borders between Northern Ireland and the Republic?

For now cross-border entrepreneurs seem to benefit from Brexit. On the British border in Ulster increases the number of customers from Ireland   It is estimated that even 20% of customers come from the other side of the border in comparison to 2% in 2015. The main reason is, without doubt, the plummeting sterling rate  . Also Irish shops do not suffer from the lack of interest from the neighbours from the North. The number of customers in Dundalk is constant.

But  the hard political reality may put an end to this idyllic picture. One of the main postulates of Leavers was to ‘get back control over British borders, which may seem at odds with Common Travel Area agreement. CTA was established in 1923 after the Troubles and evolved later into the agreement similar to Schengen Area- the real borders disappeared. Now, the crucial question that should be answered is how to implement coherent law system reconciling CTA and demanded full border control. Although David Davis declared that ‘hard’ border will not return uncertainty remains. A solution that seems to be the most probable is to ask the Republic of Ireland to carry out the border control, so in fact, make the Irish border the external border of the United Kingdom. Interestingly, it may be unacceptable for British hardliners, but not for Irish government. The majority of Irish politicians talk positively about  British proposal .  But the task is not easy, especially from the legal perspective. How complex the problem is shows the report of House of Lords. Point 241 of the report suggests that a new bilateral agreement is necessary. What is also important, the new agreement should be approved by the European Union.

I partially share the opinion of one of the  Sinn Fein politicians (unfortunately I cannot find the quotation)  who said that British problems were the last thing Ireland should take care of. Europe experiences a deep crisis and one of its elements is a crisis of responsibility. People do not believe that their vote matters. Always ‘they’ do what they want, which sometimes helps to avoid a tragedy, but sometimes also consolidates the feeling of impuissance. The ‘hard Brexit’ is, in my opinion, the only way to show people in Europe and around the globe that they have to live with their political decisions.  Casting the ballot into a ballot box should be the act of responsibility. But if it comes to the question of Irish-British border the adjective ‘hard’ seems to be the worst one. This 360 kilometer-long line is important not only for the two states but also for the European Union as a whole. It is the only place where the EU will have a land borderline with the UK. Restrictions that will touch entrepreneurs (especially transport) and citizens are expected to cause decrease in economic growth of cross-border area. Ireland is 12th economic power in the EU as far as nominal GDP is concerned, and 2nd (!) in terms of GDP per capita (Eurostat 2015).

But maybe there is a light at the end of the tunnel? Both the UK and Irish governments desperately want to avoid a return to hard borders says the already mentioned report of House of Lords, so to expect the negotiations is the only thing one can do. Yet for now Ireland is claimed to benefit from the chaos. Britons, even before Brexit, applied en masse for Irish citizenship. In April the sharp increase of applications was to be observed- 33% on the basis of Irish-born grandparents and 11% on the basis of Irish parents.  After Brexit became a fact this number increased even 80% compared to the previous year. As all citizens of Northern Ireland are entitled to Irish citizenship the development of this phenomenon is to be expected. Also white-collars and qualified persons e.g. lawyers register their businesses in Ireland. Fairly openly Dublin aspirates to become ‘London 2.0’ luring investors and big companies to move their headquarters to the capital city of the Republic.  On the surface everything seems to be under control, yet Irish economy may expect an impending doom due to ‘hard Brexit’. Being preceded by the United States, the United Kingdom is the second export partner of the Republic (15,1% of export) and the biggest (32,2%) import partner (Central Statistics Office). Imposition of tariffs and exclusion of the UK from European Economic Area will mean the tragedy for Irish economy. Just to compare, Germany’s share in Irish export comprises 6,6% and 7,9% as far as import is concerned (CSO). Finding  new markets would be crucial but also difficult task for Ireland.

This developing story should be also a matter of concern in Poland due to the millions of Poles living in Ireland and the UK, comprising ‘a vast minority’ there. Also from the perspective of Polish membership in the EU the results of Irish-British negotiations are significant. In the time of growing uncertainty one thing is sure- whatever will happen in the future Ireland and the United Kingdom will remain important partners.

MACIEJ GIERS

 Bibliography:

  • Anna Lehman, On the Irish border, people fear Brexit will bring the bad old days, 12.2016, The Guardian
  • Henry McDonald, Brexit secretary: no return to ‘hard’ borders, 09.2016, The Guardian
  • Alan Travis, Post-Brexit world could see Ireland carrying out Britain’s passport check, 10.2016, The Guardian
  • Henry McDonald, Lisa O’Carroll, Irish Republic signals support for UK plan to avoid Post-Brexit ‘hard border’, 10.2016, The Guardian
  • Tom Brady, ‘We will keep an open border’, says UK’s Brexit Secretary, as Flanagan dismisses PSNI criticism, 12.2016, The Irish Independent
  • House of Lords, European Union Committee, Brexit: UK-Irish Relations, 12.2016, URL: http://www.publications.parliament.uk/pa/ld201617/ldselect/ldeucom/76/76.pdf
  • Denis Staunton, British-Irish Brexit agreement proposed by British peers, 12.2016, The Irish Times
  • Daniel McConnell, Britons clamour for Irish passport as Brexit looms, 04.2016, Irish Examiner
  • Pamela Duncan, Applications for Irish citizenship continue to surge post-Brexit, 10.2016, The Irish Times
  • Owen Bowcott, Hundreds of UK lawyers register in Ireland in Brexit insurance move, 10.2016, The Guardian
  • Lisa O’Carroll, Dublin exploits Brexit uncertainty to lure firms from London, 10.2016, The Guardian