State aid package needed to mitigate Brexit – Ibec

The CEO of a major Irish business group has called for a state aid package for Irish business to mitigate the “risk of a divisive, damaging Brexit divorce”.

Responding to the triggering of Article 50 by the UK on Wednesday, Ibec CEO Danny McCoy said the UK was “crashing out of the EU without a new trade deal or transitional arrangements”.

“The combative and hard-line UK position has significantly increased the chances of a divisive and damaging split,” he said.

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Danny McCoy

“Irish efforts and influence must be marshalled to ensure this doesn’t happen. A far-reaching free trade agreement with minimal trade barriers is desirable, but fair competition must underpin this new EU-UK relationship. Comprehensive transitional arrangements will be needed to avoid a Brexit tariff ‘cliff edge’.”

Mr McCoy said the Irish economy was “uniquely exposed” to the effects of Brexit and that tailored solutions were needed to address specific problems.

“The free travel area between the UK and Ireland must be preserved and the future development of the all-island economy must be prioritised,” he said. “A comprehensive state aid package is needed to guard against potential economic disruption and dislocation. State agencies will need extra resources so they can better support companies diversifying into new markets.”

The Ibec CEO added that every government decision needed ‘Brexit-proofed’.

“We need to aggressively confront the UK competitiveness challenge and, at the same time, position Ireland to take full advantage of the inward investment opportunities that will arise,” he said.

Also commenting on the UK’s decision to leave, managing partner of PwC Ireland, Feargal O’Rourke, said the most likely outcome was for the negotiations to leave the UK without trade arrangements in place after 2019.

Mr O’Rourke said Ireland would have to trade with the UK under the current list of tariffs.

“We are in unchartered waters,” he said. “Since the Referendum in June 2016, it has been something of a rollercoaster, and we have spent a lot of time analysing what the implications of Brexit might be.

“We believe that it is likely that the UK will leave the EU by the end of March 2019 acquiring Third Country status with no trade or transition arrangements in place.

“Businesses can now begin their Brexit plans in earnest. We are now at the start of the action phase of Brexit planning and, while there is a long road ahead, the end game is becoming a little clearer.”