All Brexit options will be bad for Irish economy: study

Research commissioned by the Irish government compared four possible Brexit outcomes to the status quo scenario of Britain remaining in the EU.

The worst case would see no exit deal being reached and Britain falling back onto World Trade Organisation rules, amounting to a 7 percent hit to Ireland’s GDP by 2030, according to the study.

Such a blow would cost the country’s economy 18 billion euros, with Ireland’s annual growth slashed from 2.2 to 1.7 percent, according to the analysis by consultancy firm Copenhagen Economics.

Britain joining the wider European Economic Area (EEA), often cited as the “Norway model”, would be the best scenario with a 2.8 percent hit to Ireland’s GDP as duty free trade would continue on most products.

“Without a doubt, the study underlines the importance of a satisfactory transition period and exit deal,” said Heather Humphreys, Ireland’s business innovation minister.

“The government is utterly determined to get the best possible deal for the Irish people, negotiating as part of the EU 27 (member countries), and in full support of (the EU’s) chief negotiator, Michel Barnier,” she added.

Brussels and London are currently discussing the terms of a transition deal, to ease Britain’s departure from the bloc, with talks expected to conclude in March before negotiations over a future deal.

The British government has so far ruled out joining the EEA or remaining part of the European single market or customs union.

But if the ongoing Brexit negotiations were to conclude with a customs union, the study estimated a negative impact on the Irish economy of between 3.4 and 4.3 percent, in part owing to the greater risk of regulatory divergence.

A free trade deal being signed between the EU and Britain would also lead to a 4.3 percent dip in the Irish economy, against the no-Brexit baseline.

Humphreys said the study was commissioned to “help us to prevent the worst from happening”, cautioning that the findings did not take into account measures being put in place by Dublin to mitigate Brexit risks.