‘Plan for no deal’: Central Bank governor
IRELAND must plan for a no deal Brexit in January, the Governor of the Central Bank, Gabriel Makhlouf, has said.
The transition period ends on December 31, however fears have risen in the past week of a nodeal Brexit after the UK government proposed legislation that would break international law by breaching parts of the Withdrawal Agreement.
‘Too many people were hoping the transition period would carry on for ever,’ Governor Makhlouf said yesterday
‘It would be wise to plan on the basis that there won’t be a deal [before the January 1] and there will be a hit,’ he warned.
Speaking at an event organised by the Institute for International and European Affairs (IIEA) in Dublin he said the Central Bank has previously estimated a crash out Brexit will cost the Irish economy 1-2 per cent of GDP, but he said those estimates need to be reviewed.
While the Central Bank here believes a no-deal Brexit will hurt the Irish economy, regulators believe the financial system as a whole here is ready for Brexit, whatever shape it takes. This comes as the House of Commons backed the second reading of the controversial UK Internal Market Bill last night, voting 340 to 263 despite some highprofile objectors.
Meanwhile, Tánaiste Leo Varadkar has said the British government’s Brexit ‘negotiating tactic’ has backfired. Mr Varadkar said countries including the United States are questioning future trade deals with the UK over its handling of the latest Brexit fallout.
He called for the British government to change its mind on its plan to break international law by breaching parts of the Withdrawal Agreement.
The UK Internal Market Bill has caused huge controversy over its impact on talks with the EU and on international treaties. It could rewrite parts of the Brexit Withdrawal Agreement relating to the provisions around all-Ireland trade.
Speaking in Co. Kildare, Mr Varadkar said: ‘I think it’s a good thing that the trade talks are continuing. The most important thing for Irish farmers and exporters is that we secure a free trade agreement so there are no tariffs and no quotas on the trade of goods between Britain and Ireland. That is so important for jobs and rural Ireland.
‘Ultimately the call will be made by chief negotiator Michel Barnier and the European Commission and I would have confidence in them to make the right decision because they are the ones in the room.
‘I think what they [UK government] have done – if it was a negotiating tactic – has now backfired.
‘Countries all around the world, the United States and other countries, are wondering if this is the kind of place [they] can do any deal
‘Doesn’t respect international law’
with or any treaty with.’ The bill has been criticised by former British prime ministers including Tony Blair, David Cameron and John Major. And yesterday the former UK, attorney general Geoffrey Cox, who was prime minister Boris Johnson’s top legal officer when he negotiated the agreement, said that reneging on the deal would be an ‘unconscionable’ breach of international law.
British MPs debated the controversial new bill that would breach the Brexit Withdrawal Agreement and international law, if passed, including undermining the Northern Irish protocol, yesterday.
Mr Varadkar said yesterday: ‘Brexit was supposed to be about the UK being independent, being sovereign, being able to negotiate trade deals with America when they felt they have been held back by the European Union.
‘If the UK becomes a country that no longer obligates its treaties, that doesn’t respect international law, there is no country that is going to want to deal with them.