Exporters to weather Brexit storm: Noonan

Michael Noonan, the former finance minister, said he is confident Irish exporters will be “able to cope” in the event the UK crashes out of the EU with no Brexit deal.

Exporters to weather Brexit storm: Noonan

Michael Noonan, the former finance minister, said he is confident Irish exporters will be “able to cope” in the event the UK crashes out of the EU with no Brexit deal. Mr Noonan said “uncertainty” generated by the British parliament over its plans to exit the EU by March 29 is “bad for business, bad for investment, and bad for trade”.

However, he said he believes Irish exporters can “ride out” a no-deal storm, adding that Ireland should not be overly concerned about Brexit.

“It’s disappointing, but that being said, Irish industry is very resilient — the export side is very resilient. And something that has never been discussed is the fact that when the (Brexit) referendum took place, the pound sterling was trading at around 72 pence,” he said. Sterling has since slumped to 86p which means that Irish firms selling into Britain have already weathered a huge devaluation.

Mr Noonan said: “What I’m saying is that a devaluation of sterling is almost the equivalent of a tariff of the same magnitude, and yet the Irish exporting (industry), and that’s an awful lot of people, have succeeded in holding their position, and increasing their position in the English market. So we are resilient, we are able to cope.”

Speaking at the opening of a new office building in Limerick, Mr Noonan said that apart from the food industry, Brexit won’t be “catastrophic” for the Republic. Mr Noonan said he believed British Prime Minister Theresa May’s negotiations with the EU “didn’t appear to be smooth or efficient”, but added that she does not deserve to take all of the blame.

“I’m sure there was a lot of people at fault. She was in a difficult position, and she still is,” he said.

Mr Noonan said he is confident the EU would not “cave in” at the 11th hour. “I’ll tell you this much, the EU won’t cave in anyway. I know those people very well, I worked with them for years. There’ll be no cave in,” he said. Mr Noonan also said that an early general election is unlikely. “The Government is three years in office and there’s another two years to go. That’s not what [Fianna Fáil leader] Micheál Martin tied the confidence and supply (agreement) to. He said he wouldn’t have an election now because of Brexit, but he tied the period of the Government to one more budget, so that carries it on,” he said.

“His definition of a budget is not only the announcement on budget day, but the Finance Bill and the Social Welfare Bill and they won’t be through until next Christmas. So, it seems to me that no one is thinking about an election at the moment.”

Meanwhile, with just 10 days to go before the UK is set to leave the EU and no divorce deal in place, markets are getting optimistic that a crash-out Brexit will be avoided and that a second Brexit referendum may be on the cards.

“Consensus appears to be buying into our view that a no-deal is increasingly unlikely to materialise,” said Barclays analysts.

“We believe that investor sentiment towards UK exposure could continue to improve.”

Meanwhile, Societe Generale strategist Kit Juckes said: “The betting market is convinced that there will be an extension, thinks a no-deal exit is highly unlikely, and is warming to the idea of a second referendum.”

Additional reporting Bloomberg

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