Dublin and London prepare for "no deal"

Separately, the Irish and British governments have presented their plans to deal with an exit from the European Union without agreement.

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In the United Kingdom, a major information campaign has been launched across the country announcing: "Prepare for Brexit". DANIEL SORABJI / AFP

An hour apart, without consultation or coordination, the Irish and British governments presented Tuesday, October 8, their preparations to face a Brexit without agreement, proof that such an outcome is now taken very seriously. But if political unity was complete in Dail, the Irish Parliament, divisions were evident in the House of Commons. "Given the chaos in Westminster, the importance of our stability (policy) can not be underestimated »said Michael McGrath of the opposition Fianna Fail.

The Irish government has presented its budget for 2020. Strange exercise, since the Irish economy is doing very well, now completely recovered from the financial crisis: growth of 5.5% this year, unemployment of 5.2% after a peak at 16 % in 2012. But the specter of Brexit could turn everything upside down. Prudent, Dublin has chosen to make the "no deal" its basic scenario. "It's an unprecedented budget, where we have to manage the risks for our nation"says Paschal Donohoe, the finance minister.

The United Kingdom is – by far – Ireland's largest trading partner, receiving a quarter of its exports, as much as all the countries of the European Union (EU). Moreover, the bulk of trade with the EU goes through the "land bridge" that Britain represents: typically, goods arrive in Dover, are trucked to Liverpool or Wales, and then brought by ferry in Ireland. In case of congested British borders, the entire supply chain of the country would be affected.

Article reserved for our subscribers Read also Ireland, collateral economic victim of Brexit

Injection of cash

The Irish government therefore expects growth of only 0.7% in 2020 in the event of a "no deal", as well as a vertiginous drop in private investment (-24%). The country's finances, which should post a slight surplus this year (+ 0.2% of GDP), will return to the red, with a deficit forecast at 0.6%.

To cope, Ireland announced that it would release 1.2 billion euros of aid (1.7% of its total budget) in case of "no deal". To this will be added European aid, the amount of which has not yet been determined.

Half will be dedicated to supporting the tourism, agriculture and fisheries sectors, which are likely to be the most affected. Part will also be directed towards social benefits.


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