The finance minister of Ireland has warned that the economy of the country will take a four percent hit in case of a no-deal Brexit.
Today, the Pascal Donohoe, the Irish Finance Minister, informed his colleagues in the government that a “disorderly” Brexit would particularly have an impact on the agri-food and manufacturing sectors in the country- resulting in slower economic growth over the next five years.
The government of Ireland were warned that the risk of a no deal Brexit has increased in recent weeks, as Theresa May, the British Prime Minister, is struggling to look for a way through the deadlock on the issue in the British parliament.
A no-deal Brexit could result in the return of a hard border on the frontier between Ireland and Northern Ireland, even though London, Dublin and Brussels have all ruled out installing a customs infrastructure in case of this scenario.
Talking about the assessment, Donohoe stated: “There remains considerable uncertainty surrounding the format the UK’s exit from the EU will take.”
He added: “The assessment by my Department shows that a disorderly exit would be particularly severe.”
He noted that the level of economic activity will be around 4.25 percentage points lower than our existing trajectory over the medium-term.
He continued: “This aggregate figure hides an even larger hit to economic activity in labour-intensive sectors such as agri-food and indigenous small and medium-sized enterprises.”
According to a research that was published by the House of Commons library last Monday, a pproximately £34 billion worth of goods and services are exported by the United Kingdom to Ireland, with £12.8 billion are coming the opposite way.
The trade connections between Northern Ireland and the Republic are particularly pronounced, with a third of the goods exports of Northern Ireland going to its southern neighbour.
Around 27 percent of all the goods imports of Northern Ireland come from the Republic.
Theresa May is planning to reopen the negotiations with the European Union over the post-Brexit backstop arrangement that is especially aimed to prevent a hard border with Ireland.
The plan to align the United Kingdom with the customs union of the European Union until a trade deal can be implemented has been widely turned down by the MPs.
The European Union has repeatedly said that the withdrawal agreement is not up for renegotiation.