- Brexit is set to damage Ireland’s economy no matter what deal Theresa May agrees, according to analysis produced by the Irish government.
- Ireland’s GDP will take a 4.3% hit in a free trade agreement-style Brexit, and a 7% hit if the UK walks away from talks without a deal.
- Real wages in Ireland will also fall under every scenario.
LONDON – Ireland’s economy will be worse off after Brexit, no matter what sort of exit UK government pursues, according to an impact assessment published by the Irish government on Thursday.
The analysis, titled ‘Ireland and the Impacts of Brexit’, concludes that Irish GDP, trade and real wages will all take a significant hit under every scenario modelled by Irish government officials.
Ireland is not in the UK. However, the UK is its largest trading partner, and the final Brexit deal agreed by British and European Union negotiators will have major ramifications for the Irish economy. Not least because Ireland shares an invisible border with the UK which facilitates the free movement of people and goods.
Prime Minister Theresa May’s current Brexit policy is to leave both the single market and customs union and then negotiate a wide-ranging free trade agreement (FTA) with the EU.
The Irish government, led by Taoiseach Leo Varadkar, estimates that Ireland’s GDP would be 4.3% worse off under a free trade agreement-style Brexit, with exports taking a 4.5% hit and imports 4.8%.
The worse scenario for Ireland would be a WTO deal, in which the UK would walk away from the EU in March 2019 with no deal in place. This would wipe 7% off Ireland’s GDP, 7.7% off its exports and 8.2% off its imports.
Even in a “soft” EEA-style Brexit, in which the UK would remain in the single market, the Irish economy would be left off in a worse state. GDP by 2.8%, imports by 3.3% and exports by 3.5%, the analysis says.
Here is a summary of the Irish government’s assessment:
The assessment also found that the real wages of Irish people will suffer as a result of Britain’s decision to leave the EU.
Real wages, the difference between how much wages are growing and how much prices are rising, will be 8.7% lower for low-skilled workers in a WTO scenario than if Britain had chosen to stay in the EU, and 6.5% lower for high-skilled workers. In the “soft” Brexit EEA scenario, real wages will be 2.6% lower for high skilled workers and 3.5% for low skilled workers.
Last month, a Brexit analysis produced by UK government officials and leaked to the press found that Britain would see lower economic growth under every Brexit scenario modelled.
It found that with no deal, UK economic growth would be 8% lower than remaining in the EU, and with a free trade agreement, it would be 5% lower. Growth would be 2% lower even under the “soft” EEA model.
The analysis also found that every region of the UK will be left worse off as a result of Brexit, particularly those which produced the largest Leave votes in the 2016 referendum. For example, the northeast faces a 16% hit to its economy while the west midlands could lose up to 13%.
Here is the full regional breakdown of the economic impact assessments that MPs have now been able to see pic.twitter.com/dsWOfyDXyv
— Laura Kuenssberg (@bbclaurak) February 7, 2018
Tom Brake MP, Liberal Democrat and champion of anti-hard Brexit group Best For Britain, told Business Insider time was running out to stop both Britain and Ireland “careering off a cliff.”
“It comes as no surprise to learn that Brexit will be just as damaging to the Irish economy as it will be to the British one,” Brake said.
“As the daily drip drip drip of Brexit bad news turns into a flood, time is fast running out for British Ministers to take control, stopped us careering off a cliff and give the public a vote on the deal and the option to exit from Brexit.”
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