Ireland could gain an additional €15 billion a year in foreign direct investment (FDI) if Britain opted to leave the EU, a conference heard yesterday.
Amid all the doomsday predictions associated with the so-called Brexit scenario, Ana Boata, senior economist with credit insurer Euler Hermes, laid out one possible benefit for Ireland.
She estimated that the State could attract 25 per cent of British FDI inflows, equating to about €15 billion, if the latter was no longer guaranteed access to European markets.
Ms Boata said Ireland's attractive tax code and business-friendly environment made it a viable alternative to Britain for companies seeking a gateway to Europe.
Nonetheless, Ms Boata, who was speaking at a Brexit conference hosted by the Irish Exporters Association (IEA), said her firm put the probability of a such a scenario at just 10 per cent, making it "unrealistic".
Benefits
She said the possible benefits to Ireland would be strongly outweighed by negative risks to trade and investment here, some of which might start in advance of the referendum, which is scheduled for 2017.
In the short term, the main threat was “delayed investment” by firms, she said, noting that evidence of this was showing up in the UK data. With big decisions hanging in the air, firms tend to delay investment decisions.
IEA chief executive Simon McKeever said Britain was Ireland’s most important trading partner, taking more than 20 per cent of its exports and underpinning some 200,000 jobs .
Export market
On the other side of the equation, he said, Ireland was ranked as Britain’s fifth biggest export market and underpinned an equivalent amount of jobs over there.
“It’s incumbent on both countries to work together to secure the Irish-UK trade relationship going forward,” he said.
While he does not believe Britain will end up leaving the EU, he said Ireland needed to “scenario plan” for all eventualities. The Irish business diaspora, which included 45,000 Irish directors of UK companies, needed to mobilise to push for a Yes vote, he said.
Paul Finnerty, chief executive of ABP Foods, which employs 5,000 staff in the UK, said Britain was only two-thirds self-sufficient in beef "so it has to import, and its number one import market is Ireland."
If the UK exits, he said, it would probably forge a new bilateral trade agreement with South American producers such as Brazil, Argentina and Uruguay, resulting in a flood of cheaper beef, which would have negative consequence for Irish cattle prices.
British ambassador to Ireland Dominick Chilcott said the Irish dimension to the debate was not being overlooked.
