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Brexit Causes Foreign Crisis In Ireland



Brexit Causes Foreign Crisis In Ireland

The prime minister of Dublin is feeling the pressure from economists. 

These economists have begun predicting lower growth for Ireland’s economy. 

Numerous companies have started to warn of the dire impact that Brexit is going to have.

Why Ireland?

Ireland is feeling the consequences from Brexit more so than any other country. 

This is due to the significant amount of trade and finance that intertwines Ireland and the United Kingdom. 

This year marked the one hundred anniversary of Ireland’s independence from Britain’s rule. 

However, Ireland remains deeply affected by the choices that their next door neighbor makes.

What is Being Said?

John Bruton, who served as the prime minister of Ireland from 1994 to 1997, stated that it was the most dangerous and the most difficult issue that Ireland has faced in the past fifty years.

Numerous exporters have warned that earnings and economic growth would fall in response to the decline of the pound. 

This is happening after the international bailout of 2010.

A banking meltdown occurred shortly after the rescue.

The 2016 European Economic Forecast shows the recent economic recovery of Ireland

It also indicates that they are not expected to return to their days of unsustainable growth. 

These numbers are found below:


Shares in Ireland have significantly declined. 

This is mostly because the United Kingdom is where the second most amount of Ireland's exports go. 

The country also accounts for the biggest portion of Ireland’s services. 

The United States is the number one export destination for Ireland

On another note, Prime Minister Enda Kenny is fighting demands for reunification polls coming from nationalists in Northern Ireland. 

This is occurring as Kenny is trying to deal with losing a key ally within the European Union. 

The following chart shows the vote for whether or not Northern Ireland should be allowed to hold their referendum on whether they want to stay with the United Kingdom or join the Irish Republic.

Ireland has many reasons that would justify them in distrusting the European Union.


Some are saying that the Brexit vote is affecting Northern Ireland more than anywhere else. 

It is said that Northern Ireland’s biggest worry at the current time is whether or not conflict is going to come. 

Northern Ireland has remained relatively at peace since the referendum they had in 1998. 

Kenny is also dealing with members of his party trying to overthrow him. 

On top of all this, the only border between the United Kingdom and the European Union needs to be considered. 

According to Eoin Fahy, the consequences from Brexit are “mind-boggling”. 

Fahy works in the capital of Ireland at Kleinwort Benson Investors and is employed as the chief economist.

Can We Still Be Friends?

In 1973, both Britain and Ireland joined the European Economic Community. 

Ireland was attracted to join to escape the way that England was perceived by the country.

Over forty years later, these two nations are still intricately connected in the following ways:

  • Economically
  • Linguistically
  • Culturally

Ireland utilizes the Euro. 

The country does around forty-five billion dollars’ worth of trade with the United Kingdom. 

Around three hundred and eighty thousand Irish citizens that lived in the United Kingdom were allowed to take part in the vote on whether or not to leave the European Union.

Some the residents of Northern Ireland come from the United Kingdom. 

The following image shows the dynamics of the population in Northern Ireland:


When Ireland needed the bailout six years ago, the United Kingdom stepped up like a good neighbor and chipped in to help even though they are not part of the region that uses the Euro as their currency.

Last Wednesday, Theresa May took over as the prime minister of Britain. 

At this time, she spoke with the following leaders:

  • Enda Kenny (Ireland)
  • Angela Merkel (Germany)
  • Francois Hollande (France)

How Are the Companies Taking This?

Netwatch Systems, based in Carlow, southeast Ireland, was one of the many companies that thrived on the ties between Ireland and the United Kingdom. 

Netwatch systems is a video-surveillance company that monitors over five hundred different sites and sends a warning using live audio if an intruder is present. 

Some of the cities that they watch are Manchester, London, and Birmingham.

Netwatch came to the United Kingdom in 2007. 

Presently about one-fifth of all sales they make takes place in the United Kingdom. 

The 8 percent fall in the way the pound measures up to the Euro since the vote has deeply hurt the company.

One of the founders of the business, David Walsh, stated that everyone was shocked. 

He says that they have managed to make it through an eight recession and are now finding another knock on their door.


How are the politicians and executives in Ireland going to react to the potential foreign-policy crises knocking at their door? 

This potential crisis eclipses both the recent bailout and the collapse of the banks. 

This possibility is what drove Kenny to begin creating a government unit back in 2015.

This unit was developed to come up with plans in case Brexit occurred. 

Proposals have involved the possibility of providing some exporters with support. 

However, the government has admitted that it's hard to prepare plans before they can see what the overall effects of Brexit are going to be.

The most obvious issue comes in the way of a border.

This border stretches three hundred and ten miles from the north and the republic. 

It also stretches around sixty miles from Dublin to Derry along the eastern coast.

Unionist Celebrations

In Belfast last week the annual Unionist celebrations took place. 

This event illustrated the delicacy of the balance that still exists in Northern Ireland. 

This balance remained in the United Kingdom following the independence of Ireland back in 1922.

During the celebration, there were some incidents that took place. 

A few skirmishes took place between different Protestant and Catholic gangs. 

A fake bomb was also thrown out of a car window and into the parade’s path. 

Political Parties?

The main parties remain split over their view of Brexit. 

The Protestant Democratic Unionist Party are for the option of leaving and the Catholic Sinn Feign fighting to stay in the Union. 

Both parties run an executive in Belfast together. 

This executive was the result of an agreement in 1998 called the Good Friday Agreement that ended years of sectarian conflict. 

The manager remains neutral in the should we stay or should we conflict.

Kenny had an idea to create a Brexit forum of only Irish. 

Days after the vote to leave took place; Northern Irish opposition forced Kenny to throw out this idea. 

This action proved to be a misstep that resulted in Kenny’s party demanding he set a timetable to step down. 

This act also exposed the political fault line that currently exists between the south and the north.

According to Lee McGowan, if Brexit is not handled properly it could reveal the tensions that have always existed between unionists and nationalists. 

Lee McGowan is employed at Queen’s University in Belfast as a senior politics lecturer.

Border Control?

Border controls have mostly disappeared due to most of Northern Ireland’s violence having ended and the wide acceptance of the European market being mostly a single entity. 

Every day, around thirty thousand people cross a frontier that was once known for gun-running back when the Irish Republican Army was running its campaign for independence from British rule.

After the United Kingdom’s vote to leave the European Union, the possibility of a solid border remains on the forefront of most Irish minds, according to Charlie Flanagan. 

Privately, however, officials seem to be less concerned that his will happen. 

They argue that reintroducing border controls would help no one.

Peter Madden is a man who travels from South to North, from his home located in Meath to his garden supply job in Dungannon, twice a week. 

Madden says that he is not worried that border control will return. 

He also says he does not feel he has to worry that there will be guys hanging out of ditches with guns once again, either.

The following image shows the border between the Republic of Ireland and Northern Ireland. 

Northern Ireland is a part of the United Kingdom.


Economic Impact?

Madden is one of many that are more focused on the implications Brexit is having on the economy. 

The pound dropping is slowly making its way throughout the economy. 

It is affecting exporters, like Netwatch, all the way to farmers, like County Clare’s Eddie Punch.

Around forty percent of food exports for Ireland make their way to the United Kingdom. 

Because of this, agriculture appears to be the most exposed area to possible tariffs and the effects of Brexit.

Punch has one hundred and eighty cattle. 

He stated that Brexit’s impact could already be felt due to beef prices being dropped by meat processors.    

Punch is the head of a representative group containing about ten thousand farmers. 

He said that the meat processors are talking up the negativity to take advantage of the situation and get the prices farmers are charging for their cattle to drop.

Punch further stated that there is always some level of gamesmanship present, but when a story like Brexit comes around, this gamesmanship takes place a hundred times more than before the story occurred. 

He says that there have been utterly ridiculous offers and that some of the meat processors have flat out refused to buy the cattle in the first place. 

There are also studies showing that Brexit will have negative impacts on the United Kingdom’s economy. 

There are further links between a reduced GDP in the United Kingdom and the reduction of demands for Irish exports. 

If demands for Irish exports decreases, then the GDP in Ireland will fall as well. 

It is expected that the following areas of the Irish economy are going to be affected by the Brexit vote:

  • Trade
  • Foreign Direct Investment
  • Energy
  • Migration

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Opportunities for the Irish?

Bruton, the former prime minister, stayed up and watched the results of the Brexit vote before finally going to bed early on June 24. 

Martin Shanahan was in the air at the same time. 

Martin Shanahan, the head of IDA Ireland. 

IDA is the agency for the state that is in charge of winning investments. 

Shanahan sensed the shock and returned from New York to Dublin a day before he was supposed to.

Shanahan sent a steward to the cockpit so that they could check for the results. 

The IDA had pitched Ireland to some companies before the vote took place. 

One of which was Standard Chartered Plc. 

The IDA contacted thousands of clients within hours of receiving news of the way the majority went away. 

Shanahan said that the IDA was well prepared for the United Kingdom to vote the way they did. 

Right now the plan of action is for there to be an advertising drive underlining the advantages of Ireland within the United States and Europe. 

However, even this idea is not entirely straightforward. 

The fact is that the United Kingdom’s decision to leave the European Union could take away one of the key advantages overseas investors were provided with when investing in Ireland. 

This is the lower corporate tax rate of 12.5 percent. 

The United Kingdom has a 15 percent rate, which has currently been mooted by the United Kingdom’s government to offset the economic consequences of the Brexit vote.

The ‘Northern Liberal Club’, as it was labeled by one official in Ireland is going greatly to feel the loss of one of its principal members.

The United Kingdom and Ireland have worked together to lead the opposition against efforts lead by the European Union to harmonize the tax laws.

Both Ireland and the United Kingdom joined the European Union because they wanted to be a part of something bigger, according to Bruton. 

He said that when they both joined the union, it fostered a relationship between the two nations that was built on mutual and equal respect. 

He further states now that the United Kingdom has decided to go another way, the harmonizing relationship is at risk of being lost.   


Here’s a brief Recap of what Ireland concerns:

  • Diminishing economy
  • The possibility of tighter border control
  • Unrest
  • Demand for safe dropping
  • Fewer investment opportunities

What will happen between them and the United Kingdom now?

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