There is no scope to reopen Britain's withdrawal agreement with the European Union, Minister for Finance Paschal Donohoe has said.
In a speech to the Peterson Institute for International Economics in Washington, Mr Donohue said the Irish Government will engage with the United Kingdom to do "all we can to avoid a no-deal scenario developing". But he added that the text of withdrawal agreement cannot be changed.
“I believe the European institutions will engage with ways in which maybe clarifications can be provided, in which issues can be teased out but this has to be done off a bedrock of political text that has been agreed, that is well-balanced and that will not be changing.”
Mr Donohoe is in Washington for meetings with senior officials from the Trump administration, Congress and the IMF and World Back. Part of the purpose of the visit is to outline Ireland's position on Brexit, the technicalities of the backstop, and Ireland's possible role as a bridge between the United States and the European Union once Britain leaves the bloc.
Noting that the withdrawal agreement secures a transition period which provides certainty to citizens and businesses, Mr Donohoe said that Ireland wants to see "the closest possible relationship between the UK and the EU" in the future.
Mr Donohue said that the withdrawal agreement is a “carefully balanced agreement and as with any such negotiations of this scale, there have been compromises on both sides”. In particular, he noted that the agreement included a transition period which provides certainty to citizens and businesses.
Asked by reporters about an ESRI report which says that a no-deal Brexit could halve Ireland’s GDP, he said that the government understood the scale of the challenge facing the economy if Britain leaves the EU without an agreement.
‘Exceptionally serious’
“We have always acknowledged that a no-deal scenario would be an exceptionally serious development for the Irish economy but this is why we have aimed to move into 2019 with national finances that are fully balanced, it is why we made the decision to prioritise capital investment in our economy next year at a time of risk.”
“That being said, we have always acknowledged that if we move into a no-deal scenario, that is a situation of great risk for our economy and for the European economy and it is why it is important now in the time that is available that we do engage through the European institutions with the United Kingdom to see if clarifications can be provided. But the key message that I am emphasising to American policy makers here today is that the withdrawal agreement that was agreed by the European Union, that work is now done, that text will not be changing.”
Mr Donohoe highlighted the risk of further falls in sterling on Irish exporters, particularly in the food industry.
“There is no doubt that if there was to be a further weakening of sterling in the aftermath of a disorderly Brexit taking place, that would continue to pose a real challenge to the Irish economy,” though he noted that the Government had been putting in place a number of measures to help businesses prepare contingency plans.
He said that the Irish Government had been preparing for possible Brexit scenarios in three main ways. "Firstly, there has been engagement with the European Commission in terms of actions that would have to be negotiated with the European Commission in terms of a no-deal scenario. That work is going to continue and will become even more intense given where we stand."
Shared responsibility
He also pointed to actions that the Irish Government can take directly, such as recruitment planning to prepare for a possible no-deal Brexit. Finally, he highlighted the outreach programmes and seminars that have been held by the Government to engage with all sectors of the Irish economy, including businesses and farmers. “We will be continuing with our contingency planning but it is now imperative that Irish companies, Irish entrepreneurs [and] those involved in Irish agriculture look at their plans as well, and if we can be of help with those plans we will, but it is a shared responsibility that we face as we deal with the kinds of risks that could develop.”
During his speech to the Peterhouse institute, Mr Donohue addressed corporate tax. He said he welcomed recent reforms to the US tax code, which has seen US companies repatriate historical profits to the United States to be taxed.
Ireland has “played its part” in terms of addressing unfair corporate tax practices, including legislating for BEPS (Base Erosion and Profit Sharing) and new controlled foreign company rules.
He also stressed that Irish-US investment is a two-way street, highlighting the investment Irish companies have made in the US.
Mr Donohue is due to meet US Treasury Secretary Steve Mnuchin later on Tuesday amid growing concern about continuing US sanctions on Russian individuals which are impacting Aughinish Alumina in Limerick.
