Irish financial services and agricultural exports could sustain a major hit if Britain were to vote to leave the EU, according to economist Colm McCarthy.
In the first of a series of presentations on the topic to an Oireachtas committee on European affairs, the UCD economist said there could be very serious repercussions for Ireland if its nearest trading partner decides to pass a prospective referendum on exiting the EU.
“Ireland has more at stake in this than any other EU member... If Britain were to vote to quit the EU I think there would be very serious consequences for Ireland under a number of heads.
“Free trade in agricultural products could be particularly difficult to maintain with Britain...The British have never taken to the Common Agricultural Policy– they think it’s too costly and they growl about it constantly – and agriculture will be a significant element in any post-referendum negotiations.”
Since the foundation of the State, Britain has consistently been Ireland’s most important trade partner. An estimated €1 billion worth of goods and services are exchanged between the two countries daily.
Just under a third of Irish imports come from the UK, which also remains a key export market .
“To a degree, Ireland has managed to convince companies to locate their activities in the IFSC in Dublin which are satellite activities for things that are going on in London, and I think most people in the industry might agree that if the city of London gets screwed then it won’t be good news for the IFSC in Dublin,” said Mr McCarthy.
“If the British left and we didn’t that could be very awkward for the Border counties because you could end up with passport controls and passport inspections at that frontier.
"If the external border of the EU were to be up between Dundalk and Newry then people would need to be very careful to negotiate arrangements which would permit our current situation to survive, if that's possible."
Current British prime minister and Conservative Party leader David Cameron has pledged to hold a public referendum on Britain's continued EU membership if his party is returned to power following this year's general election.
Issues such as immigration, EU interference in domestic policies and Britain’s budgetary contribution to central EU coffers have proven particularly contentious across the Irish Sea over recent years, a situation which has become even more prominent since the rise of Eurosceptic sentiment embodied by the Ukip party’s increasing popularity.
According to Mr McCarthy, Irish negotiators must seek to play a key role in influencing pre-referendum talks in which Mr Cameron will seek concessions in order to entice the UK electorate to vote against the break.
Irish involvement will also be critical in any free trade negotiations should the British public choose to end the country’s 43-year association with the European community.
"I don't think it's the case that the Irish Government can sit around and start taking an interest in the topic only after a referendum...The Irish Government should insist from the outset on close involvement in those negotiations pre the referendum."
Responding to Fine Gael TD Joe O'Reilly's observations that influential representatives both here and within the Irish-born British community of 400,000 should start applying informal diplomatic pressure on Britain to remain in the EU, Mr McCarthy said such a move would be futile as the British electorate "will decide what they want to do regardless of what we say".
However, he was keen to point out that the prospect of a British departure from EU affairs remains unlikely given the hypothetical nature of such a referendum and the strong pro-union feeling among many people in the country.