Brexit could cost Ireland €3bn a year: ESRI

Its research into the consequences of a possible Brexit on Ireland in the areas of trade, foreign direct investment and migration found businesses in Northern Ireland and those along the border would be worst hit.

The British Government has been given a mandate to hold a referendum on the UK's membership of the EU.

Associate research professor at the ESRI Edgar Morgenroth said that although the EU is Ireland's most important trade partner, the UK is still a significant export destination.

"That importance has declined over the years, but it's still significant (though) not as significant as the rest of the EU," he said.

"The bottom line is the Irish interest is not served by the UK leaving the EU."

Home-grown firms would take the brunt as they rely more heavily on trading over the Irish Sea, compared to the multinationals.

Firms along the border would also be badly affected as they rely on sales to Northern Ireland.

But Dr Morgenroth also pointed out that businesses in Northern Ireland would be harder hit by a demise in North/South trade, as they gain more from the relationship overall.

“Given that there seems to be a bigger reliance on the Irish market for Northern Ireland businesses, any trade impediment would obviously hurt Northern Ireland more,” he said.

Energy

The study also looked at the impact of a Brexit on the energy market.

It found that Ireland could be forced to look at building a new electricity interconnector with mainland Europe, most likely France, if current access through the UK was blocked.

The cost could be upwards of €10bn.

The report also scotched suggestions that Ireland could significantly benefit from more foreign investment by global firms by-passing the UK in favour of Ireland, as it remains in the EU.

“Our analysis suggests this would not be significant,” said Dr Morgenroth. “Bigger countries like France and Germany would probably benefit more from a redirection of foreign direct investment away from the UK.”