Ireland must plan for possible EU breakup, says economic adviser

Ireland should be drawing up contingency plans for the EU unravelling after Brexit and a possible French departure, an economic adviser to successive Irish governments has said.

Dr Sean Barrett urged Enda Kenny’s administration in Dublin to strongly back any French attempt to gain more concessions from Brussels to prevent a possible “Frexit”.

The economic expert claimed the republic had been too distracted by an election earlier this year to do more to persuade fellow EU states to grant David Cameron a better deal from Brussels to prevent Brexit.

The Trinity College Dublin academic, one of a core of advisers who persuaded the then taoiseach Charles J Haughey to create a more open economy, leading to the Celtic Tiger economic boom years, said the EU’s collapse was a possibility, especially if the Eurosceptic Front National leader, Marine Le Pen, becomes president of France next year.

“If France exits the EU, Ireland would lose a major ally in debates over the common agricultural policy (CAP). Irish agriculture would have to adjust to competition with New Zealand and South America,” Barrett said.

“Ireland’s strategy while the EU survives should emphasise trade and market access, and also to develop trade with the rest of the world, as an insurance against an EU breakup. We should have at least a scenario to develop trade with non-EU countries in case of that breakup.”

He said the Fine Gael/Independents minority coalition must do more than the government did for Britain in arguing for a better deal for France, to prevent a possible EU meltdown.

“If Ireland wants the French to stay in the EU, presumably to retain an ally to support CAP, we had better form an ‘entente cordiale’ now. The government has to ask: ‘What do French voters see as the EU’s defects? And how can we help?’ This we failed to do in the UK’s case,” Barrett said.

“The Brexit referendum took many people in Ireland by surprise, as it did in the UK. Ireland has most to lose from a hard Brexit, with tariffs and border posts reinstated with its main trading partner.

“Ireland should have sought more concessions for the UK in order to give Mr Cameron more to put before voters in the referendum. The Irish general election campaign and the indecisive result occupied the government in the republic for the first half of 2016. These factors, combined with complacency that remain would win, meant that Ireland did not get the UK referendum result it wanted.”

He said Ireland should have sided with Britain in “curtailing the superstate and regulating migration” during negotiations with Brussels.

Dublin needs to become one of France’s strongest EU allies as the union comes under more strain, Barrett said.

Barrett, a former member of the Seanad, Ireland’s second parliamentary chamber, predicted that the US corporation tax rate would fall under Donald Trump. This would prove massively challenging for Ireland, he said, given its much criticised 12.5% corporation tax rate, which has encouraged US multinationals including Dell, Apple and Google to establish their European bases in the Irish Republic.

A longtime critic of the euro, Barrett predicted more turbulence ahead for the single currency.

“Ireland sleepwalked into the euro currency and paid the price in the banking collapse and bailout. The humiliation of Ireland by the European Central Bank and Mr Claude Trichet in particular has dampened down any remaining Irish enthusiasm for a federal Europe,” he said.

“The banking and economic collapses were inevitable. It was flawed policies and a flawed currency that brought a country down.”

The government and main opposition parties insist that Ireland, traditionally one of the most pro-European countries, remains committed to the EU project.

However, since the Brexit vote, there have been a few Irish voices questioning the wisdom of Ireland staying in the EU while its largest trading partner, the UK, is planning to leave.

Last month, the broadcaster and television presenter Gay Byrne said the republic should consider leaving the EU on the same day as Britain.

“Since our main trading partner in Ireland is the UK and our second main trading partner is America, it might be worth considering if they continue with Brexit that we could come out of Europe on the same day that Britain is coming out,” he said on his Lyric FM show.

The presenter for 37 years of RTÉ’s The Late Late Show added: “I have no idea whether anybody agrees with me or not. We now know that large numbers of people, at least half the population in the UK, are unhappy with Europe, are unhappy with Brussels, are unhappy with what is going on at the moment. There is no reason to believe that the same proportion doesn’t apply in Ireland.

“A large number of people are unhappy with Brussels and are unhappy with the way Europe is going, and maybe they might consider some other possibility.”