NORTHERN IRELAND: Brexit Crisis: Sinn Fein Calls For Irish Unity Poll
- Ireland has the EU's fastest-growing economy but also more to lose from Brexit than any other member state, with far-reaching implications for its trade, economy, security of energy supplies and peace in British-ruled Northern Ireland
- After 56 percent of Northern Irish voters sought to remain in the EU compared to the 52 percent of the United Kingdom as a whole who voted to leave, Sinn Fein's McGuinness demanded that London call a referendum on a united Ireland
Northern Ireland’s deputy leader Martin McGuinness called on Friday for a vote to unite the two sides of the Irish border as stocks tumbled in the economic and political fallout from Britain’s decision to quit the EU.
Ireland has the EU’s fastest-growing economy but also more to lose from Brexit than any other member state, with far-reaching implications for its trade, economy, security of energy supplies and peace in British-ruled Northern Ireland.
After 56 percent of Northern Irish voters sought to remain in the EU compared to the 52 percent of the United Kingdom as a whole who voted to leave, Sinn Fein’s McGuinness demanded that London call a referendum on a united Ireland.
“The British government now has no democratic mandate to represent the views of the North in any future negotiations with the European Union and I do believe that there is a democratic imperative for a ‘border poll’ to be held,” McGuinness told national Irish broadcaster RTE.
“The implications for all of us on the island of Ireland are absolutely massive. This could have very profound implications for our economy (in Northern Ireland).”
The call from Sinn Fein, Northern Ireland’s largest Irish nationalist party, was rebuffed by pro-British First Minister Arlene Foster and Irish Prime Minister Enda Kenny, who said there were much more serious issues to deal with.
Kenny called an emergency cabinet meeting shortly after the result and afterwards published a plan his government had prepared in advance, listing actions it would take over trade, investment, British-Irish relations and Northern Ireland.
Ireland’s central bank had warned that a withdrawal would hurt economic growth and jobs and significantly impact the financial sector, while a government-commissioned report found it could cut trade with Britain by at least 20 percent.
Irish banks, whose exposure to the UK accounts for around 21 percent of total assets, led the Irish stock market eight percent lower, with shares in Bank of Ireland and permanent tsb down 25 percent and 21 percent down at 1345 GMT.
Europe’s largest airline by passenger numbers Ryanair , building materials group Kingspan and packaging producer Smurfit Kappa also fell sharply. The local bourse was down by as much as 16 percent earlier on Friday.
The yield on Ireland’s benchmark 10-year bonds [IE10YT=TWEB] was marginally higher at a near record low 0.84 percent. The country’s debt agency said its funding position was strong with limited financing needs for the rest of the year and through the first half of 2017.
The cost of insuring exposure to Irish government debt nearly doubled on Friday, surging to the highest level in nearly 2-1/2 years.
Finance Minister Michael Noonan, who earlier this week said an estimated cumulative Brexit-related hit on the Irish economy of as much as 1.6 percent of GDP would be “containable”, said the outcome would not derail his immediate budget plans.
“There is nothing catastrophic for Irish fiscal policy on the horizon,” Noonan told national broadcaster RTE with the caveat that the hit to economic growth could limit his budget plans beyond 2018.
Investec Ireland said it will likely cut its GDP forecasts for 2016 and 2017 that are currently in line with government predictions of 5 and 4 percent, calling the referendum result “unambiguously negative” for the Irish economy.
Davy Stockbrokers said that while it did not think a Brexit will be sufficient to push Ireland into recession, it could lower growth by 1 to 2 percent in both years.
Ratings agency S&P said Brexit had no immediate impact on Ireland’s sovereign ratings and it expected the Irish economy to stay resilient enough to withstand the negative impacts.
Brexit may not be all bad for Ireland, and Noonan said there may be some upside if companies keen to stay in the EU moved to Dublin from London. The contingency plan calls for marketing efforts to be intensified in sectors like financial services for firms wanting to be based in the EU.
But of most concern to Dublin is the impact on Northern Ireland, which has the only land frontier between the UK and the rest of the EU. It was marked by military checkpoints until a 1998 peace deal ended three decades of sectarian violence.
Foreign Minister Charlie Flanagan told Reuters this week that the reintroduction of a hard border would have to be considered in any negotiation and that the return of controls, for customs or security, could pose a difficult challenge for the peace process.
The dismantling of military border posts was a key aspect of the peace deal between Catholic nationalists seeking a united Ireland and Protestant unionists who wanted to keep Northern Ireland British. Over 3,600 died in the conflict.
Kenny said Ireland would do its utmost to keep the country’s decades-old common travel area with Britain. His plan says that options for possible customs and excise controls, including the role of modern technology, would be analysed with a view to minimising trade restrictions.