In The Wake Of Brexit there will be Major Challenges Ahead
An Taoiseach, Enda Kenny TD
When we look back in time I am sure that 2016 will be remembered as a year when our maturity as a nation was marked by dignified and respectful state commemorations. It will also be remembered as a time of great change – both in the politics of this country and in the wider political environment, when the people of the United Kingdom voted to leave the European Union.
UK EU Referendum Result
That was a decision that will have a lasting impact on the future of these islands. It was not the result that we had hoped for but it is, nonetheless, one that we fully respect. The Government I lead recognises that the decision that has been made is final and we are now planning for a future in which the United Kingdom will no longer be a member of the European Union within a few short years. We always knew this result was possible and we are ready for the challenges ahead.
Political events in the UK have moved swiftly since then – I spoke with newly appointed Prime Minister Theresa May last Wednesday evening. We spoke of the strong relationship between Ireland and the UK that is closer now than ever before. We agreed to build on the close cooperation that has been developed between the Irish and British Governments in recent years, including in their support of the peace process and the Good Friday Agreement, and in progressing areas of co-operation under the Ireland-UK Joint Statement.
I also met with Chancellor Merkel last Tuesday in Berlin where I re-iterated Ireland’s particular concerns around the economy, Northern Ireland and the Common Travel Area in the context of forthcoming negotiations on the UK’s exit from the EU. We share the objective of constructive negotiations towards a close future relationship between the EU and the UK. I will also be meeting with President Hollande in Dublin on this Thursday and will take the opportunity to advise him of our concerns. I will also attend the British Irish Council meeting in Cardiff on Friday of this week to discuss the outcome of the referendum.
There will be major challenges ahead, for the EU, the UK and for Ireland and we must work together at all levels to meet these. The stakes have always been higher on this issue for Ireland, than for any other EU Member State.
The reasons for this are well known:
· The economy and the relative importance of each other’s markets for trade;
· Northern Ireland, the Peace Process and British-Irish Relations;
· The Common Travel area and our shared land border;
· The role of the UK within the EU and its strategic value to Ireland in that context.
We were very active throughout this entire process in engaging with the UK Government, and with our EU partners, outlining our concerns and our interests. We are continuing to do that.
Our primary goal now is to protect and advance those interests.
As a result of many months of preparatory work, we have a whole-of-government contingency framework, within which we will continue to track and develop key policy issues and negotiating positions.
This will be used in key economic areas such as trade, energy interconnection, social welfare arrangements, education and research cooperation. It will, in reality, extend right across every single area of Government activity.
Above all, our contingency management arrangements will prioritise the key political and strategic issues arising from the implications for Northern Ireland, the common travel area and the border.
We recognise that detailed contingency planning for a Brexit is particularly challenging because we do not yet know the precise arrangements, or the timescale for the UK’s withdrawal from the EU, and we don’t know what the new relationship between the UK and the EU will be. Nevertheless, we will be scaling up and intensifying work to mitigate risks across Government Departments and in key agencies such as Enterprise Ireland and the IDA.
I have also decided to make some structural changes to the workings of Government to ensure an effective whole-of-Government response to the challenges ahead.
· I will establish a new Cabinet Committee on Brexit, chaired by myself, to oversee the overall Government response, including both the economic impact and the negotiations at EU level and with the administrations in London and Belfast.
·In my own Department, our existing EU, British-Irish & Northern Ireland, and International divisions will be integrated under a Second Secretary General. This will ensure that we have a comprehensive approach to all the implications of Brexit, including the opportunities as well as the threats.
· The Government will also strengthen staffing in other key Departments and agencies and our missions abroad to ensure we have the capacity to deal with Brexit.
I attended the meeting of the European Council on 28 June and the subsequent informal meeting of twenty-seven Heads of State or Government (minus the UK) on 29 June. The outcome of the UK referendum was the dominant focus of the discussions.
At the separate Informal meeting of 27 leaders,
· it was agreed that Article 50 of the Treaty on European Union provided the only legal framework for withdrawal ;
· that it is for the UK government alone to trigger this by formally notifying the European Council; that this should happen as soon as is reasonably possible, that there can be no negotiations before then and
· that the negotiations will be under the overall political control of the European Council;
· and that while it is hoped that in future the UK and EU will enjoy a close relationship, it should be clear that there can be no access to the Single Market without respect for the four freedoms, including freedom of movement.
I took every opportunity, both at the European Council itself and in other discussions, to underline Ireland’s unique relationship with the UK and our concerns in relation to Northern Ireland, North-South relations, the Common Travel Area and trade between the UK and Ireland.
The negotiations on withdrawal are unlikely to commence for some months yet, and they will take a considerable time to complete – a two year timeframe is envisaged in the Treaty.
In the meantime, it is important that people are aware that the UK has not for now left the EU. Until it does so following the Article 50 negotiations, it remains a full Member, with its existing rights and obligations. There is no immediate threat to the free flow of people, goods and services between our islands.
Separate negotiations on the new relationship between the UK and the EU will also have to take place. It is in this second set of negotiations that such crucial questions as the UK’s future trading relationship with the EU, and the movement of people to and from the UK, will be addressed. It is expected that they will begin and be carried forward in parallel with the withdrawal negotiations.
Ireland’s starting point will be straightforward. A stable, prosperous, and outward-looking UK is clearly in our own interests and those of the EU as a whole. The closer the UK is to the EU, the better for all of us, and above all for Ireland.
However, it will be up to the UK itself to work out what it wants to achieve, and how it sees its future.
Within the EU, Ireland will argue that the negotiations should be conducted in a positive and constructive way. But this will also depend on the UK’s approach. I will be encouraging the new British Prime Minister to set realistic and achievable objectives and to build confidence in the UK’s good faith.
Some media reports have suggested a desire among some European officials and institutions to impose a harsh exit deal on the UK to discourage other EU members from pursuing a similar path.
But it is in nobody’s interests for the UK and the EU to have anything but the best possible future relations. Any perception that the UK is being punished for its democratic decision to exit the European Union will only further inflame the growing populist backlash against European integration.
We should instead focus our collective attention on learning the lessons of recent years and reconnecting Europe to the new challenges faced by our populations from global economic competition, inadequate investment, technological change and excessive unemployment. In this view, I am confident that Ireland will not be alone. There are other Member States who will, like us, be especially anxious to see a constructive and respectful outcome to Britain’s exit negotiations, and we will co-operate particularly closely with them.
Our first priority will be to ensure that our own specific interests are protected to the maximum possible degree. We will in parallel take forward with the UK those matters which can be settled bilaterally, in whole or in part. But in many crucial areas, above all, those where the EU has the strongest competence such as trade, it will be the outcome of the wider negotiations which will be decisive.
Trade and Investment
We must remember that the majority of our goods and services exports are to the Euro area (34%) and the US (17%) – the UK accounts for around 16% of exports.
The UK remains a member of the Single Market until such time as negotiations are concluded and, overall, our trading relationship continues as normal. Currency fluctuations will present some challenges in the short-term for indigenous SMEs and the Agri-food Sector in particular.
Enterprise Ireland is implementing a plan to help exporters and a short term strategy identifying other options and possible instruments will be developed to protect jobs in vulnerable sectors. The impact on enterprise and trade in Border counties will be monitored closely. As part of overall contingency planning a dedicated unit has been established in the Department of Agriculture to work on relevant sectoral issues and the Minister is convening a consultative committee of stakeholders to ensure a full exchange of information as the negotiations proceed.
Bord Bia is providing practical guidance to SMEs to assist them in dealing with marketing challenges and the management of volatility arising in the short term.
The Minister for Jobs, Enterprise and Innovation will be working to ensure that there is certainty as early as possible on the terms of future trading relationships, including the extent of access by the UK to the EU’s single market.
Of course, Ireland remains a strong, competitive and open economy. Our talent pool, our competitive and consistent tax regime and our long track record of working with foreign companies are all factors in which companies are interested. The fact that Ireland is English-speaking and a member of the EU and Eurozone is also attractive. IDA Ireland will continue to market Ireland across the globe as the number one location for foreign direct investment.
Our social progress depends on a strong economy. Brexit should remind us that we should never take our economy for granted, and the policies that have brought us this far on the road to recovery may, in light of our neighbour’s decision, be insufficient to take us to the next stage of our journey.
I have asked Ministers Noonan and Donohoe to ensure that the upcoming Budget in October is shaped by, and addresses, the challenges resulting from Brexit, and to set out a national economic response. This will have a particular reference to:
· the need to further strengthen the competitiveness of our personal and corporate tax regimes for mobile investment and skills;
· the opportunity to build on the strong public support in Ireland for EU membership as a magnet for international investors seeking certainty and stability;
· the need to protect the strong recoveries in our tourism, agri-business and other regional, employment-intensive sectors in recent years; and
· the need to further diversify our export markets.
The Government fully recognises that the outcome of the UK referendum creates particular concerns in Northern Ireland. I fully understand why many people in Northern Ireland are deeply concerned at the prospect of Northern Ireland being outside of a project that has delivered so much for political stability, reconciliation and economic prosperity. We will continue to work urgently and intensively with the British Government and the Northern Ireland Executive to see how collectively we can ensure that the gains of the last two decades are fully protected in whatever new arrangements are negotiated.
All three administrations share the common objective of wanting to preserve the Common Travel Area and an open border on the island of Ireland. The North South Ministerial Council Plenary Summit met in Dublin Castle on 4 July. It was agreed to work together to ensure that Northern Ireland’s interests are protected and the importance of North/ South co-operation is fully recognised in any new arrangements which emerge from negotiations.
Ten specific actions were agreed to optimise North South joint planning and engagement on key issues arising following the UK referendum result. This will include a full audit of work programmes in key North-South work programmes to establish risks and likely impacts arising from the UK’s planned withdrawal from the EU.
The Government believes that there is a need for the widest possible conversation on the implications of the referendum result for Ireland, North and South and for North/South relations and will continue to explore options to achieve this in a way that is not divisive. We need to ensure that all voices can be heard on this issue – all political parties throughout the island, inside and outside government, as well as civil society, NGO’s and business.
There will be a broader public consultation – including on an inclusive all-island basis – and an ongoing engagement with other parties in the Oireachtas, as well as with the Brexit Stakeholder Group which has already been meeting for some time now.
Cross Border Cooperation
Of course, we recognise the real challenges that are presented from living in a border region. Here in Donegal and in other border counties, the effects are already being felt. The current weak sterling is having an impact on consumer spending patterns. Small local businesses are often first to feel the effects of sterling versus euro fluctuations. We will carefully monitor the effects on local economies in the weeks and months ahead. Our Local Enterprise Offices, our enterprise agency regional offices and the measures contained in our regional Action Plan for Jobs will all be activated to assist local businesses as much as possible.
I can assure you that the preservation of the common travel area and the preservation of the free movement of goods, people and services across these islands remain top priorities for the Government. I believe the benefits of these arrangements are also highly valued by the UK Government and the Northern Ireland Executive. We have already been talking at political and official level with our colleagues in the UK and at the North South Ministerial Council about how best we can work together on these issues.
Of course, the closer the future relationship is between the UK and EU then the better it will be for all of us across these islands.
And we remain deeply committed to ongoing cross-border co-operation and to honouring the commitments that we made as part of last year’s Fresh Start Agreement to investing in All-Island Infrastructure.
This includes our Government’s 75 million pound investment in the A5 project to improve ease of access to the North-West of the island. This is a key enabler of our regional ambitions for growing jobs and tourism. The first phase of this project – from New Mills to North of Strabane is scheduled to commence in 2017. We must work – alongside the Northern Ireland Executive and the UK Government – with the EU institutions to ensure that there is no uncertainty about the availability of EU co-funding for this and other key infrastructural commitments arising from the future withdrawal of the UK from the EU. This applies also with regard to the projects that are already committed to, under PEACE and Interreg.
Those who suggested that there would be no adverse financial impact arising from a leave vote should now work to ensure that this will be the case.
This should include the commitments we made to an enhanced strategic and coherent approach to development across the North West region. As part of last year’s Fresh Start Agreement we agreed to support the regional development work of the North West Gateway Initiative involving Donegal County Council and Derry City and Strabane District Council. My Government has committed €2.5 million to the NW Development Fund and we are talking to our colleagues in the Northern Ireland Executive about matching funding.
While there is always room to do more, there are some real and practical examples where cross-border co-operation is making a real difference to peoples’ lives – including in this part of the country. I am thinking in particular of important initiatives in cross-border medical services. The radiotherapy unit that is being developed at Altnagelvin hospital in Derry on a joint basis between the governments of North and South will provide important access to radiotherapy services for people in Donegal and throughout the North West.
Earlier this year also saw the introduction of an important new cross-border cardiology service which will give Donegal patients suffering from a STEMI heart attack direct access to services in Altnagelvin Hospital in Derry. The all-island Congenital Heart Disease (CHD) Clinical Network that is being developed as an initiative of the Ministers for Health, North and South, will also be of benefit to all people on this island.
We will work all the harder in this post-Referendum period to ensure that the benefits of the peace process in Northern Ireland are preserved and that we continue to build on and develop areas of cross-border co-operation.
Ireland is in an important position given the strength of our relationship with the UK on one hand and our connectedness to the EU on the other.
But my primary goal is Ireland’s national interests and that goal will be foremost in any discussions: with the UK; with our EU partners; and between the EU collectively and the UK.