With each day that passes the ramifications of Brexit become ever more entwined. Leaving aside the damage that is being done to the UK’s economic and political reputation, we now see the stirrings of debate on a putative Irexit — an Irish exit from the EU.
That it is ridiculous and risible is obvious to even a casual analysis, but we have seen with Donald Trump and the British with Brexit that mere foolishness does not deter from a course of action.
So let’s look at the economics and politics of Irexit.
Irexit is a policy which is pushed, domestically, by a few. Most all of these are older white males.
This is a reality; two facts follow: The deleterious effects of any Irexit would happen long after most lifespans. Second, aging western white male baby boomers are perhaps the single most insulated group on the planet when it comes to economic and political dislocation.
With little skin in the game, it’s a parlour game, an intellectual exercise, a gadfly exercise in what- iffery.
The most recent contribution to the debate was from Ray Bassett, a former Irish ambassador, who wrote a position paper for the UK ginger group Policy Exchange.
In the UK, proponents of Irexit make for a startling insight into the Brexiteers.
Some are out and out revanchists, such as Nigel Lawson, ex-chancellor of the exchequer, who suggest Ireland should, post-Brexit, rejoin the UK.
Others, such as Melanie Phillips, a Times columnist, previously doubted the legitimacy of the Irish State and suggest Ireland leave the EU to form a free trade area with the UK.
Others, such as the DUP’s Ian Paisley Jr, seem to think that because Brexit will be so wonderful, the Republic should also quit the EU.
Ian Jr also famously urged his DUP supporters to take out an Irish passport, presumably because Brexit will be so wonderful.
All this is reminiscent of the angst in the UK over migration, which exploded post-EU enlargement despite the majority of migration coming from former UK colonies.
The political right in UK seems to be able to draw fine distinctions between ‘their’ migrants (ex-colonies) and others, Poles, Romanians, and whoever, from far off countries of whom they know little. Then we have the economics of Irexit.
Since 1992, with the adoption of the single market, we have seen a remarkable shift from dependence on the UK, in both imports and exports and in goods and services.
Leaving aside concerns to the nature of some of the flows around services, the trend is undeniable and is long term. We have moved from an economic appendage of the UK to a small but integrated cog in the global economic system.
Does anyone think tax alone would keep the multinational sector anchored here? The reality is large swathes of our exports in services and goods are dominated by multinationals. Leaving the single market would sever this base.
An exception is the agribusiness market which is both domestically owned and generally small scale. It has a disproportional exposure to the UK. The reality is that the UK outside the customs union and single market will be harder to crack.
But we export more in education services than in beverages; we export three times or more manufactured goods than food; we export six times more in chemicals and related goods; and value-added by industry or by distribution and transport is more than 10 times that of agriculture. Seeking Irexit on the basis it would be good for agribusiness is seeking to amputate a hand for a broken finger.
Brexit will be disruptive. The EU has made it clear, as it has to, there will be no frictionless borders between the union and the UK.
Irish SMEs need to be helped to reorientate from any dependence on the UK. This is our challenge and our opportunity.
Brian Lucey is professor of finance at the School of Business, Trinity College Dublin.