The German Bertelsmann Foundation with the assistance of the IFO Institute have produced a report attempting to analyse the effects of a UK exit from the European Union. The report makes sobering reading for all, but particularly people in Ireland and Northern Ireland. The report makes a serious effort to put figures on what has to date been a very esoteric discussion.
It looks at two assumptions, a “soft”exit and a “hard” exit, examining the likely GDP loss and the Table below summarises the likely level of losses.
Northern Ireland, caught between Ireland and the rest of the UK is likely to be an even greater loser than anywhere else.
It is difficult to see how any re-negotiation can go anywhere near satisfying UK demands. Free movement of workers is a core principle of the European Union and no change will be countenanced by other states, particularly countries like Poland. The Social Insurance rules pre-date UK membership of the EEC, dating from 1971 and again are a core principle. The complexity of habitual residence can be seen from Irish Social Welfare rules on the matter. The European Court of Justice is also likely to have its say at some stage on such an issue. If you cut contributions by one State, then others will be clamouring for for similar treatment. Finland’s large net contribution was an issue in their recent General Election. Finally, even if a revised treaty was possible, what chance a new EU treaty, with no real benefits, being accepted by all EU parliaments and of course by the Irish public by way of a referendum?
The Irish Civil Service are already started to prepare for the eventuality of UK departure. However, looking at these figures, I sympathise with their efforts to squaring this circle. However with the combined Conservative/UKIP/Liberal Democrat vote running at 56% plus or minus 2%, it is becoming more and more likely to be a problem to be faced in the near future.