A new report on Ireland’s preparations for Brexit said that the consequences of the UK crashing out of the European Union on 31 October without a deal would be “profound”, posing risks for the Good Friday Agreement and political stability in the North.
The report, released after a meeting of Leo Varadkar’s cabinet in Dublin, said that there was now a “significant” risk of no-deal this autumn, in which case trade between Northern Ireland and the Republic “could no longer be as frictionless as it is today”.
Speaking outside Government Buildings in Dublin, Tanaiste Simon Coveney said: "A no-deal Brexit will put political relationships on this island under strain.
"It will make it more difficult for the institutions of the Good Friday Agreement to function and it will be a fundamental disruptor to the all-island economy as it functions today seamlessly.
"There is no sugar-coating of that message. For people living in border counties and in Northern Ireland, this will be really difficult."
The report stated: “The impact of tariffs, and of the customs and SPS (sanitary and phytosanitary) requirements and associated checks necessary to preserve Ireland’s full participation in the Single Market and Customs Union, would be significant for the operation of the all-island economy and would involve additional costs for and disruption to businesses throughout the island, particularly those in Northern Ireland.
“We continue to work closely with the (European) Commission with a view to minimising these negative consequences of no-deal, but any arrangement will clearly be sub-optimal.”
And it warned: “Citizens and businesses cannot assume that because a no deal Brexit was averted in March and April that the same will happen in October – the need for prudent preparations is more pressing than ever.”
A no-deal Brexit would be “an unprecedented event, bringing with it disruption and severe negative economic impacts” reducing the Republic’s predicted rate of GDP growth by almost 3 per cent, said the report.
Impacts would be worst felt in the agri-food, manufacturing and tourism sectors, as well as by importers reliant on just-in-time supply chains and parts of the retail sector, with an estimated increase in unemployment of 50-55,000 after the UK leaves the EU.
“There is little doubt that, at least in the initial period, tariffs and checks and controls on UK imports will be disruptive to trade across the Irish Sea, said the report.
And it warned that no-deal would be “very damaging” to political stability in Northern Ireland and might lead to the reimposition of direct rule from London.
Former Northern Ireland secretary Lord Hain, a leading supporter of the People’s Vote campaign for a second referendum, said: “The repeated claim that the Irish would not impose tariffs and customs checks in the event of the UK crashing out of the EU has been definitively dismissed in official documents published in Dublin this afternoon.
“Both Boris Johnson and Jeremy Hunt have made it clear they are intent on inflicting a destructive Brexit on the whole of the UK without any democratic consent, least of all in Northern Ireland where the damage would be felt first and worst.
“This assault on our democracy must be opposed and, instead of the decision about our future resting in the hands of the 160,000 individuals who are members of the Conservative Party, it must be given back to the people in a final say referendum.”
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