Limerick economist's warning over Brexit flight

Nick Rabbitts

Reporter:

Nick Rabbitts

At the seminar are Gerard Murray, MD Aaron PCB Assemblies, Minister Pat Breen, Carole Coleman, seminar moderator, Dan Hegarty, customs compliance expert and keynote speaker, Dr Alan Ahearne

At the seminar are Gerard Murray, MD Aaron PCB Assemblies, Minister Pat Breen, Carole Coleman, seminar moderator, Dan Hegarty, customs compliance expert and keynote speaker, Dr Alan Ahearne

THERE is a danger that local firms could quit Ireland for Britain to minimise their exposure to Brexit.

That’s according to Limerick-born economist Dr Alan Ahearne, who addressed a breakfast briefing organised by the Local Enterprise Office.

Dr Ahearne, who is based at NUI Galway, spoke on the dangers and uncertainty linked to Britain’s decision to quit the European Union last year.

It comes as talks to effectively copy continental laws into the British statute books got under way in the Westminster parliament.

“Some Irish companies will be so exposed to the UK market, and because they may find it so difficult to diversify into continental Europe, they may well relocate some of their operations to the UK. There will be such big barriers put up – but one way to get around them is to locate in Britain and operate from there,” he  told the audience gathered at the Absolute Hotel.

Since the vote in June 2016, the value of the pound against the euro and other major currencies has collapsed – and Dr Ahearne, who used to work at the US Federal Reserve predicts they will be completely unforecastable.

“People ask me which way exchange rates will go. I might as well flip a coin and tell you based on heads or harps whether it will go up or down.

“It cannot be forecast. But the weakening of sterling was linked with the vote,” he said.

Dr Ahearne predicted that a so-called ‘Hard Brexit’ can be avoided, and believes a transitional agreement will be put in place, for up to two years.

“The UK will have to do some kind of trade agreement.

“But it will be impossible to negotiate that agreement between now and October 2018. The UK and Theresa May spoke about some sort of transitional agreement: something to buy time for a specified period,” he told the event. 

“The bottom line is nobody can tell where we are going to end up. It will be very important to keep a close eye on what is coming out of Brussels,” the economist concluded.