The Government's approach to Brexit will pivot towards economic issues in the coming weeks as the EU and the UK prepare for formal negotiations to begin in June.
Economic and trade issues, and the threat posed to many businesses by Brexit, will become more central to Ireland's contributions to the EU's Brexit preparations.
The Government yesterday published a detailed Brexit strategy in the wake of the weekend summit in Brussels which saw Ireland's priorities enshrined in the EU's negotiating priorities.
The strategy emphasises that the final decisions on the EU side will be taken by the member states acting together, rather than by the European Commission. The document warns of a "worst-case scenario" where the UK leaves the EU in two years without an agreement, and trade between the two reverts to World Trade Organisation rules.
Tariffs
This would mean that goods from the Republic entering the UK, including the North, would be subject to a range of tariffs. These tariffs would rise to as much as 50 per cent for some agricultural products.
The document says the aim of the negotiations should be to avoid such a “cliff edge”. It says “it is important that the UK also shares this objective and acts responsibly”.
While the Government's document stresses the need to maintain the closest possible relationship with the UK after Brexit, there are growing fears about the prospects for the negotiations following publication of details of a dinner meeting last week between British prime minister Theresa May and President of the European Commission Jean Claude Juncker.
The reports show the British have huge differences with the EU side about the conduct, timetable and likely conclusions of the talks, now expected to begin after the British general election on June 8th.
Yesterday, the Taoiseach declined to comment on the reports in the Dáil.
Meanwhile, Ms May told the BBC she intends being “a bloody difficult woman” towards Mr Juncker in the forthcoming negotiations.
The Financial Times reported last night that the EU had raised its opening demand for Britain's Brexit bill to an upfront gross payment of up to €100 billion. It said EU negotiators had revised their calculations to maximise liabilities including post-Brexit farm payments and EU administration fees.
Irish approach
The five principles which will guide the Government’s approach to managing the economic effects of Brexit are set out in its document.
It says it will seek EU financial support for Irish businesses and industries which face particular challenges from Brexit as the EU’s exit will represent “a serious disturbance to the Irish economy”.
It will also develop its own plans to assist businesses, including offering support to exporters through State agencies.
The Government says it will “leverage our position within the EU27 negotiation team, to shape the EU27 approach to negotiations”.
A central part of this effort will be seeking transitional arrangements after 2019 which recognise the difficulties Ireland faces because of its geographical position.
It will seek to maximise any opportunities from Brexit, in particular by attracting financial services businesses. And it will “continue to prudently manage our economy and the public finances”.
The Government also says EU contributions to support the peace process must be maintained after Brexit.
* The Government document on its Brexit strategy can be foundhere.
