Enda Kenny with Theresa May outside 10 Downing Street after the Brexit vote. Photograph: Dan Kitwood/Getty Images
Lisa O'Carroll and Stephen Collins in Dublin
Irish leaders have warned of an economic “disaster” on both sides of the border without decisive action to confront the effects of Britain’s impending departure from the EU.
Amid warnings of “incalculable consequences” for the Irish Republic and Northern Ireland as the Brexit process unfolds, Ireland’s prime minister Enda Kenny will convene an unprecedented cross-border summit of political leaders to consider what steps to take.
The prospect of Brexit has already raised intractable questions about the border that runs across the island, and has vexed farmers who send half their beef to British dinner tables. The slump of sterling is squeezing Irish exporters and the future of Northern Ireland, which relies heavily on EU subsidies, is uncertain. Some forecasters fear that Ireland could be harder hit than Britain by the tumult.
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At this delicate moment, the Guardian and the Irish Times are collaborating on a week-long series exploring the predicament facing Irelandand the UK.
Kenny told the Irish Times that he would summon all political players to an unprecedented All Island Civic Dialogue on 2 November. “It is really important that we have all of the voices reflective of Ireland over a series of meetings,” he said. “I am going to invite to that all of the political parties who wish to attend and I don’t mean that I expect a grandstanding performance from each of them.
“It is more of a listening exercise from political parties because we need to hear the voice of retail, the voice of trade, of commerce of the construction sector, education and all of these areas, north and south.”
FacebookTwitterPinterest An Orange Order parade in Northern Ireland. Enda Kenny said all voices would be heard at the summit. Photograph: Charles McQuillan/Getty Images
Such is the seriousness of the situation that the taoiseach and the Irish foreign minister, Charlie Flanagan, have assembled a team of almost 100 people to work on Brexit, with embassies across Europe being beefed up to cope with the fallout.
“Brexit has been referred to as the biggest foreign policy issue facing the UK since EEC accession in 1973. In many ways, the same is true of Ireland,” Flanagan writes in a Guardian opinion piece.
Martin McGuinness, Northern Ireland’s deputy first minister and Sinn Féin leader said that Brexit threatened devastating consequences for the island.
“As things sit at the moment we are going to suffer big time,” McGuinness told the Guardian in an interview. “Theresa May says ‘Brexit means Brexit’, but so far as we are concerned Brexit means disaster for the people of Ireland.”
Britain’s departure from the EU will deprive Ireland of a crucial ally in Brussels. The two countries are often mutually reinforcing in the EU bureaucracy, siding with one another on matters of trade, regulation, financial services and tax.
Former taoiseach John Bruton says Ireland now has to “up its game substantially” in Brussels, lamenting what he says is the unravelling of centuries of common trade.
“We have been part of a common economic area for a very, very long time, only broken in the 18th century when Britain adopted anti-Irish trade practices and there was an episode in the 1930s,” he said. “The decision to leave is reversing 1,000 years of history between Britain and Ireland.”
For Ireland the Brexit question is not theoretical – Irish political and business leaders are already dealing with the strain brought on by the collapse in sterling following the 23 June referendum.
Britain is Ireland’s largest export partner, while Ireland is Britain’s fifth biggest trading partner, with €1.5bn (£1.35bn) in transactions each week. The London-Dublin route is Europe’s busiest airlink.
Bruton is among those warning of potential trade wars post-Brexit if Britain tries to increase market share through subsidies.
“If Britain avails of its exit from the single market to reintroduce subsidies to British food production, as was the case before the common market, this would cause serious damage to the Irish food industry and would probably necessitate retaliation by Europe,” he said. “Anti-dumping measures are part of the armoury of the EU and they have been used before and could be again.”
At the moment all Irish exporters, both north and south of the border, are grappling with short-term and long-term challenges. “There isn’t anybody in Ireland that has not been touched in some way by this. If you’re not an exporter, then you’re likely to be a supplier to an exporter. The effect of the currency slump is very serious,” said John McGrane, director general of the British Irish Chamber of Commerce.
Large food exporters to Britain have been able to insure themselves against sterling’s decline because they hedge their currencies.
FacebookTwitterPinterest Workers harvest mushrooms at Reilly mushroom farm in Athlone. Another factory, in Tipperary, recently closed down. Photograph: Clodagh Kilcoyne/Reuters
McGrane predicted job losses after Christmas on both sides of the Irish Sea, saying it was not possible to “pent up price increases without being able to pass them on”.
A mushroom factory in the small rural town of Tipperary that closed in August was an early warning sign, a canary in the coalmine. An estimated 90% of mushrooms are exported to the UK, bringing in about €120m each year.
The Tipperary factory relied heavily on British sales and closed with the loss of 75 jobs as a direct result of Brexit, with the owner blaming the drop in sterling against theeuro.
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“I did not expect when the British people went to the polls that it would have had any consequence for a small town like ours,” independent councillor Denis Leahy told the Guardian.
Last week the Irish government responded to desperate calls for help by announcing a €150m loan fund for farmers being crushed by the weakening of sterling.
“Food business works on extremely thin margins of around 2%. If you have to add 17% to your costs because of currency exchange, then you have a 15% straight loss. Irish industry is just looking on at this with great alarm,” said McGrane.
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