Ireland Prime Minister, Leo Varadkar, said Britain leaving the EU represents a risk to “nearly all aspects of national life.” In a foreword for the National Risk Assessment 2017 report, Varadkar warned Ireland was “particularly vulnerable to external developments.” He said that despite encouraging economic figures, “we cannot be complacent” because moves by certain countries towards more protectionist policies may represent a threat to our future prosperity.
The report identified the key risks facing the country which include: The changing distribution of global influence; terrorists’ incidents; loss of competitiveness; a possible over-reliance on multinational corporations; failure to respond to demographic changes; climate change; Data fraud/theft; housing crisis.
In relation to Brexit, it said there were “critical risks” for key sections such as agri-food, retail, tourism, fishing and energy. “The small size of our domestic market means that exports of goods and services are far more economically significant for Ireland than other countries,” the report said. While the report doesn’t specially mention the election of Donald Trump as US president it intimates that the Irish government must strengthen relationship with the White House.
It says: “As the US is Ireland’s second-largest trading partner, its second-largest export market and its largest source of foreign direct investment (FDI), enhancing the many strand of the economic relationship with the US is central to Ireland’s continued prosperity.”
This need to ensure smooth relations is largely driven by Ireland’s dependence on US companies, which Trump has indicated he wants to take back to America.
“Ireland’s economy and employment are heavily influenced by a relatively small number of multinational corporations concentrated in a few enterprise sectors. While this reflects the success of Ireland’s enterprise policy in attracting FDI in these sectors, it also creates a vulnerability to changes in Ireland’s attractiveness as a location for these companies,” the assessment noted.
“There is a further risk of serious negative consequences due to changes to US trade and tax policy, or from a return to economic turbulence in Europe, with potential for populist politics to deliver an increased tendency towards protectionism and trade disruption.” The report said much global instability in recent years has “its root in growing populism and anti-establishment sentiment.”
“With increased political fragmentation, this could become a feature in Ireland also. As the Irish population changes, including as a result of migration, it is possible that social cohesion will decrease and tensions will increase, as has happened in other developed societies,” the report noted. “Social cohesion can also come under pressure from inequality, real or perceived, in terms of income and job security, or a ‘two-tiered’ recovery with divergence in prosperity between major urban areas and more rural parts of the country.”
In relation to terrorism, the report stated the risk in Ireland was low, but the recent attacks in London and Manchester “serve to highlight the challenging nature of the threat.” However, Ireland needs to be particularly cautious about the potential for a serious cyberattack. “The fact that Ireland is home to a large number of international data centres means that a serious attack or cyber-security failure could have a damaging impact not just on our reputation, but also on our economy,” it said.
Ireland was described as being at “very low risk” of a nuclear accident but should one occur the fallout could be devastating with “potentially catastrophic humanitarian consequences.”
The study assessed potential costs to Ireland. Costs ranged from 4 billion euros in a scenario with no contamination where losses are reputational, through to 161 billion euros, where high levels of radioactive contamination would necessitate a prolonged period of food controls and agriculture protective actions.
Another area of concern is housing. An influx of highly paid workers into Ireland with companies setting up offices in Dublin, with UK’s departure from the EU, will turn the housing shortage into a crisis.
Homeless campaigner Peter McVerry warned people would be even more frustrated with the rental market when foreign workers on higher wages relocate.
He said: “Low-income (local) people are simply going to be priced out of even sub-standard accommodation. So we could have potentially, over the next three of four years, a catastrophe in housing unless something additional is done to what we are doing at the moment.” Adding: “We need to prevent more and more people entering homelessness.”