Eoghan Murphy: Hard Brexit is now inevitable

Minister of State for Financial Services Eoghan Murphy has said that that a "hard Brexit" is inevitable now and that there is a growing danger of a "disorderly" exit from the EU by the UK - an outcome he describes as "beyond the worst case scenario."

Mr Murphy made his comments in a series of engagements with the Irish investor community in Hong Kong where he is attending the Asia Financial Forum.

“Talk of a soft or hard Brexit is now essentially meaningless. No one is preparing for a soft Brexit anymore,” he told investors.

Mr Murphy's remarks come after reports in the British press today suggesting that the prime minister Theresa May, in a much-anticipated speech about her government's Brexit strategy, due to be delivered on Tuesday, will say that Britain needs to be prepared to leave the EU single market, and also the customs union.

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While the UK’s exit from the single market is expected, a decision to leave the EU’s customs union would have significant implications for the Border, and could, in the absence of a free trade deal between the UK and the EU, see tariffs charged on goods crossing the border or moving between the Republic and Britain.

The customs union allows tariff-free movement of goods only, while the full single market allows for the free movement of goods, people, capital and labour.

Mr Murphy’s remarks to investors suggest a growing apprehension on the part of the Government about the likely trajectory of the Brexit talks.

He says that Ireland “must work to ensure that UK leaves in an orderly fashion” adding that the “risks that would come from a disorderly exit or breakdown in talks are beyond the worst case scenario”.

Mr Murphy also criticised the European Commission, which, he said, “before and after the Brexit decision have called it, said it and gotten it wrong”.

His remarks about the Commission are thought to reflect annoyance in the Government at a suggestion by Ireland’s EU Commissioner Phil Hogan that Ireland should concentrate on its relationships with EU member states, rather than with the UK.

Mr Murphy is in Hong Kong and Beijing where he will address the Asia Financial Forum and at a number of other events with Irish investor community.

The visit is part of the Government’s efforts to position Ireland as a gateway for Asian companies in to European market.

The visit comes in advance of the European Financial Forum in Dublin Castle on January 24th which will see over 600 delegates from over 400 companies, many based in Asia, visiting Dublin for two days.