Republic’s economic prosperity ‘left facing imminent threat from Brexit’

BREXIT poses a serious and imminent threat to the Republic’s economic prosperity, its competitiveness watchdog has warned.

The National Competitiveness Council said the UK’s decision to leave the European Union represented a “structural shift” in UK trading relations with the EU.

And it warned that short, medium and long-term policy responses would be needed to safeguard the Republic’s competitiveness.

Council chairman Professor Peter Clinch said the likely shift in the UK’s trading relations with EU partners has far-reaching implications for Ireland across a range of policy areas.

“I stated... that Ireland faces a serious and imminent threat to its economic security,” he said.

“The view of the National Competitiveness Council is that this threat remains, and the UK’s decision to leave the EU is the most significant of the factors underpinning this threat.”

In a report “placing a microscope” over Ireland’s competitive relationship with the UK, the council warned that the Republic should expect the UK to intensify its investment in infrastructure, enhance and develop its tax and non-tax offering for enterprise, develop its skills and innovation base and expand its reach into new and existing markets.

“Ireland cannot afford to stand still,” Professor Clinch said.

“We can also expect other countries to continue to enhance their competitiveness positions.

“The challenges posed by Brexit provide urgent impetus to pursue policies that enhance our national competitiveness performance.”

The council restated five key areas for Irish Government action including avoiding any narrowing of the tax base and ensuring the tax system supports and rewards employment, enterprise, investment and innovation.

It also warned Ireland’s medium-term competitiveness is being affected by restrictions on State spending on capital investment.

“This will have a negative impact on our competitiveness in the future and damage our potential to secure the benefits of Brexit,” it added.

Exporting companies need to evolve into new products, markets and sectors, whilst maintaining competitive advantage in existing ones, the council stated.

Meanwhile, Taoiseach Enda Kenny has said he expects the final version of the EU’s Brexit negotiating guidelines to expand on his country’s concerns and make further specific reference to the Good Friday Agreement.

Mr Kenny told a public meeting of his party Fine Gael on Brexit in Co Kildare that reference to the possibility of Irish reunification, by consent, as set out in the Good Friday Agreement, may be referenced in the negotiating guidelines.