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BRITAIN-EU-BREXIT-IRELAND-ECONOMY
Brexit ‘damaging for Ireland’: new central bank chief
DUBLIN, Nov 21, 2019 (BSS/AFP) – Britain exiting the European Union is
“damaging for Ireland”, the country’s new central bank chief said Wednesday
in his first formal speech.
“Any form of Brexit will be damaging for Ireland,” Gabriel Makhlouf said
as British Prime Minister Boris Johnson looks to leave the EU by January 31
having recently secured a divorce deal with Brussels.
“Looking ahead… trade and ongoing geopolitical tensions as well as
Brexit pose risks to growth,” said Makhlouf, who took up his new position in
September.
Irish Prime Minister Leo Varadkar has said that Johnson’s Brexit deal
would benefit both eurozone-member Ireland and neighbouring Northern Ireland.
The UK province’s border with Ireland had been a major complication in
Britain striking its Brexit deal.
Speaking Wednesday in Waterford, southeast Ireland, Makhlouf said “the
small and open nature of the Irish economy means that it is always
particularly vulnerable to shocks stemming from abroad.
“External risks are heightened at the moment, both due to structural
developments — including the ongoing possibility of a disorderly Brexit and
the risk of an escalation of trade wars — as well as cyclical developments,
such as a sudden change in global financial conditions,” he added.
The central bank chief said reducing Irish public debt would help to
“withstand negative shocks”.
As for Brexit alone, it “represents an enormous change — and transition –
– for the citizens of Ireland, for many Irish firms and for the economy as a
whole”, he said.
“Brexit will inevitably bring disruption — even with a ‘deal’ — which,
by its very nature, will dissipate over time.
“But we must not lose sight of the inevitable long-term costs,” Makhlouf
stressed.
In September, Ireland’s central bank warned one in three farms would be at
risk in a no-deal, which could see trade barriers erected and stiff tariffs
imposed on meat.
Meanwhile, Brexit itself remains at risk, depending on the outcome of
Britain’s general election on December 12.
Last month, Ireland’s finance minister Paschal Donohoe unveiled a 2020
“no-deal” Brexit budget that includes a 1.2-billion-euro ($1.3 billion)
relief fund.
Ireland is projected to run a surplus of 0.2 percent of gross domestic
product this year.
Under no-deal projections, that would slip to a deficit of 0.6 percent of
GDP in 2020.
BSS/AFP/HR/1030