Ireland Looking For a Quick Alternative to the Backstop
The Guardian reports that Ireland’s Deputy Prime Minister Simon Coveney recently told a Paris conference that the EU has no intention of revising its plans for an Irish backstop. He told his audience, which included Brexit Secretary Stephen Barclay, that the backstop is an agreement with the UK on the basis of a ‘shared understanding’ of the peculiar situation in Ireland. Coveney also blamed Boris Johnson for failing to produce a credible alternative to the backstop and shifted the blame onto the British for escalating this situation.
The reality is that the Irish Government has no intention of assisting the British with forming a post-Brexit free trade deal. Irish Taoiseach Leo Varadkar has opposed Brexit from the beginning. Speaking on Ireland Unfiltered, he told the TV channel that Britain’s EU exit has ‘unleashed the forces of populism and nationalism.’ He has also formed an alliance with House Speaker Nancy Pelosi to ensure the Democrats vote against a US-UK trade deal if Britain leaving the EU means that the Good Friday Agreement is jeopardised. With the reality of no-deal creeping nearer, instead of refusing to cooperate with the UK Government on producing suitable alternatives to the backstop, the Irish must seize the initiative and produce their own imaginative solution to the border issue.
Boris is optimistic that he can still reach a deal with the EU, but he is preparing for no-deal at the same time. The Prime Minister’s decision to prorogue Parliament until 14th October last week proves that he is serious about preventing MPs from thwarting Britain’s EU exit on Halloween. Oxford Economics says the chances of Britain leaving the EU without a deal increased by 30 per cent once Boris prorogued Parliament. Although there are other issues with the Withdrawal Agreement, the backstop remains the main stumbling block to a smooth exit on 31st October. The Times reports that Britain’s International Development Minister Grant Shapps has complained the British Government has produced alternatives to the backstop, but that he is receiving little in return from Brussels. With the October deadline fast approaching and the British Government proving it has never been so serious about no-deal, it is time for Dublin to start compromising, and fast.
Markets Insider suggests Ireland will be one of the worst affected countries by a no-deal Brexit. They predict that 2 to 2.5 per cent of GDP could be wiped out in 2030. For Ireland, the UK accounts for over half of Irish exports and over 40 per cent of imports. 31 per cent of Ireland’s exports consisted of food and drinks in 2018. Cross-border goods trade with Northern Ireland in 2018 was worth around €3.5 billion. Martin Beck, lead economist at Oxford Economics, told Markets Insider that in the event of a no-deal Brexit, Irish GDP would be around 1.5 per cent lower by the end of 2021. This is why Varadkar would be making a terrible mistake if he keeps shunning Britain’s solutions to the border crisis and fails to produce his own.
Furthermore, Irish businesses are requesting their politicians assist them following a no-deal Brexit. They want a slice of Ireland’s unprecedented €10.4 billion corporate tax intake reserved for businesses trading in both directions that could be hit by tariffs after Halloween. John McGrane, the Director General of the British Irish Chamber Commerce, told The Guardian the Irish Government can shore up indigenous companies most at risk from Brexit. Varadkar would be wise to prevent Ireland’s tax intake from being redirected to an outcome he should be aiming to avoid instead of trying to preserve this backstop.
With Irish businesses worried about the impact Brexit will have on their ability to trade and its economic effects becoming more apparent, there is still time for the Irish Government to seize the initiative and suggest their own solution to the border crisis. But it will be the Irish who will suffer the most from no-deal and the ball is in their court to stop it.