May 22, 2019
Business News

EXCLUSIVE: Minister warns no deal Brexit would have ‘catastrophic’ effect on local businesses

A NO-DEAL Brexit would have a “catastrophic” impact on local businesses that rely on UK imports, Minister John Paul Phelan has warned.

The Kilkenny TD, who was yesterday appointed as Fine Gael’s Director of Elections, spoke out as British Prime Minister Theresa May battles to save her political career over the Brexit deal which now threatens to sink her divided government.

As a string of Ms May’s ministers jumped ship, the Irish stock market took a €3.3bn hit, worse than anywhere in Europe. The unfolding crisis hammered Irish shares, leaving top-tier companies including Ryanair and Bank of Ireland facing big losses.

“The situation is constantly changing, it is evolving by the hour as we hear of more resignations, more difficulties,” Minister Phelan told KilkennyNow.ie.

“We are entering into a very difficult process now – the negotiations in the House of Commons. When this all started, Government departments were bracing themselves for Britain leaving the EU altogether. Agriculture, light engineering and other sectors are huge employers in this region and heavily export dependent.

“The potential of Britain leaving the EU, there being no trade agreement with such an important trading partner as the UK and there being tariffs on Irish products exported to Britain, would have been utterly devastating. It would have been nothing short of catastrophic.”

However, despite the turmoil over the past 48 hours, Minister Phelan said the agreement reached between EU and UK officials earlier this week is “a step in the right direction”.

He added: “We now are moving towards a scenario with no hard border, with a customs arrangement between Ireland and Britain. All of the red line issues for Ireland have been met. But we are still in the lap of the Gods. Much uncertainty is still there. But for now at least, we are edging slowly and cautiously in the right direction.”

The Minister said the importance of reaching a deal on Britain’s exit from the UK cannot be overstated for many companies throughout Kilkenny and the South East, particularly in the food production sector, who rely heavily on UK exports.

He said currency fluctuations as a result of market volatility underpinned by fears over Brexit have “pretty much wiped out the already tight margins for food producers in particular who are exporting to the UK”.

But he added: “If the House of Commons approves the backstop in three weeks’ time, it removes the threat of a cliff-face tariff for food and these other important sectors.”

Despite mounting resistance from both Brexiteers and pro-Europeans in her own party, a defiant Ms May yesterday said she will go to Brussels on November 25 to sign off on the deal and put it to a vote.

 

 

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