Brexit would be 'lose-lose' for both UK and EU - economist
A SO-called 'Brexit' would be a 'lose-lose game' for the both the UK and the EU, according to one of the north's most respected banking economists.
But Angela McGowan of Danske Bank, speaking yesterday at a debate in the Waterfoot Hotel in Derry, conceded that the financial cost - or indeed gain - of an out vote couldn't yet be determined.
She also claimed that while Northern Ireland expects to receive increased levels of foreign direct investment through a reduction in the corporation tax rate, this effect could be reversed by a Brexit.
She was among a number of speakers at the sell-out event organised by Londonderry Chamber of Commerce.
Ms McGowan added: “There is no definitive study of the economic impact of the UK’s current EU membership or the costs and benefits of withdrawal because many of the costs and benefits are subjective or intangible.”
But she pointed out that a poll by the Financial Times of 100 leading economists found that more than three quarters believed that withdrawal would be harmful to the UK’s economy, with just 8 per cent believing it would be beneficial.
"It is true that the UK pays more into the EU’s budget than it takes out – by about £8.5 billion. But putting a price on the indirect benefits of membership is impossible. Those benefits include political stability, free trade, free movement of labour, free movement of capital, larger markets and cheaper imports."
She said Brexit is the main risk factor facing the UK economy. Continued higher uncertainty until the referendum is held may damage the recovery - and this could particularly damage investment.
She also said alternative trade arrangements with the EU after a Brexit are not simple, may involve tariffs and may not be cheap. Such arrangements may take several years to negotiate.
"Northern Ireland has a stronger trading relationship with the EU than does the UK as a whole," she said.
"While 45 per cent of the UK’s exports go to fellow EU member states, in the case of Northern Ireland this is 57 per cent, and a Brexit would require a major shift in export focus, towards Asia, emerging markets and other non-EU nations.
“Overall, though, Danske Bank markets judge that Brexit is a lose-lose game for the both the UK and the EU,” she said.
Brian Doherty, former head of the NI Government Legal Service, said there were a number of implications of Brexit that are unique to Northern Ireland, including aspects of the devolution settlement are subject of an International Agreement, with cross-border arrangements allowing for shared sovereignty; EU assistance in the form of peace funding; and the fact it is the only UK region having a land border with another Member State.
Institute of Directors poll shows 75 per cent want to stay in Europe
MORE information and less rhetoric is needed on the Brexit debate, members of the Institute of Directors said yesterday as results of an internal poll showed 75 per cent want to stay in Europe.
But although three quarters of IoD members who took part in the Brexit survey voted to remain in the European Union, just under three quarters (72.6 per cent) said their organisation did not benefit directly from EU funding.
Of the 211 people questioned, 17.5 per cent indicated they would vote to leave and 8.1 per cent said they 'don't know'.
The results were revealed as Ian Sheppard, chairman of the IoD's NI economic strategy committee and former IoD NI chair Joanne Stuart appeared before the NI Affairs Committee at Stormont to give evidence on the Brexit debate.
Speaking ahead of the meeting, Mr Sheppard said the IoD was committed to informing the Brexit debate to encourage businesses to take up the discussion internally.
"While we will not be adopting a campaigning position as an organisation ahead of the referendum, the IoD wants businesses to weigh up all considerations and arguments and to assess if, and how, Brexit could impact upon them," he said.
"Not enough boards and senior business managers are discussing Brexit for the purposes of risk assessment, exposure, identification, planning and preparation - and we would strongly urge more businesses to have these discussions, even if they don’t want to speak publicly about it.
"This is the most immediate priority as the genuine voice of businesses in the debate has been seriously under-represented."
The IoD chairman also said that while the use of EU structural funds in infrastructure development were "particularly important" for Northern Ireland and some other UK regions, the institute did not "necessarily" support blanket subsidies to create jobs and industry.
Those who would vote to leave, he said, cited too much red tape and centralised rules from Europe which "penalise small employers".