IDA poised to salvage FDI for Ireland from Brexit

Martin Shanahan, the chief executive of IDA Ireland, says the State agency will soon begin negotiations with banks and other companies located in the UK that may want to relocate to Ireland following the Brexit vote.

Mr Shanahan stressed his first preference was for Britain to remain within the European Union (EU), but he said the IDA has "done its homework" on how to maximise foreign investment for Ireland now that the UK has voted to leave.

“We have been in discussion with potential clients [who may choose to relocate to Ireland from the UK] for months. They approached us,” said Mr Shanahan. “We have a good view on the potential for Ireland.

He said discussions with potential foreign investors could begin as soon as “next week, or the week after”.

IDA’s existing 1,200 client companies are “still digesting the news”, he said. Mr Shanahan yesterday wrote to the 1,200 to say Ireland remains committed to the EU and is effectively still open for business.

He said Ireland’s “stability” would be an attractive feature when attracting new investment in the midst of the uncertainty created for the UK by the vote. Mr Shanahan also agreed that financial services and technology were two sectors where Ireland would be particularly well placed to pick up fresh foreign investment that might otherwise locate in the UK.

“But we intend to push for investment right across the portfolio, including life sciences and engineering,” he said. “Our mandate prior to Brexit was to maximise investment for Ireland, and nothing has changed in that regard.”

Terms

Fergal O’Brien, chief economist at the employers’ lobby Ibec, said the UK is now likely to “become more aggressive” in securing foreign investment to protect its economy, which could increase competition faced by the IDA.

He said a lot depends on the terms of the exit deal given to the UK, including its level of access to the EU’s internal market: “It is in Ireland’s interests to get as much stability as possible for the UK.”

Mr O’Brien suggested that while other EU states might want to impose tough measures on the UK to discourage other countries from exiting, Ireland “needs to establish at EU level that we have skin in the game” and push for leniency.

Enterprise Ireland, meanwhile, warned against the effects of exchange rate volatility for Irish exporters into the UK. It said it would also support Irish exporters to devise medium-term diversification plans.

“In addition to our team in the UK, we have put in place a dedicated email address, phone-line and team for Enterprise Ireland clients to respond to their immediate concerns and issues,” said the agency.