Opinion

Patrick Murphy: Stormont should grab the opportunities presented by a changing world

Patrick Murphy

Patrick Murphy

Patrick Murphy is an Irish News columnist and former director of Belfast Institute for Further and Higher Education.

Like many things in life, Brexit isn't what it used to be
Like many things in life, Brexit isn't what it used to be Like many things in life, Brexit isn't what it used to be

Oh dear, we appear to have lost our obsession with history.

This week marked the anniversary of perhaps the most important event in modern Irish and British history - but was there a Scarva-style re-enactment, the commemorative tramp of marching feet, or the threat of a counter-demonstration? No, not a whimper.

The event (as you are no doubt shouting aloud) was the fourth anniversary of the Brexit referendum. (You must remember Brexit. It was the worst thing that ever happened to Ireland, until something serious happened.)

But June 23 passed quietly, because Covid-19 has changed the nature of Brexit, by transforming the world. Like many things in life, Brexit isn't what it used to be.

So what has changed, will there be a UK-EU Brexit deal and how will all this impact on the economy and society here?

Both the EU and the UK have been adversely impacted by Covid. (Britain left the EU on January 31, the same day its first two Covid cases were confirmed.) Boris Johnson's failure to handle the pandemic means that Britain will suffer one of the worst economic downturns in the developed world.

Oddly, this may hasten a no-deal Brexit, because the economic damage of a no-deal can be concealed within Covid's economic destruction. Britain had previously expected a no-deal Brexit to reduce its economic output by 8 per cent over 15 years. Covid will reduce it by 14 per cent this year alone.

Certainly the German media are confidently forecasting a no-deal outcome. Boris can expect little sympathy from Germany, which failed to offer concessions to help David Cameron and Theresa May to hold off their most ardent Brexiteers.

Boris can also expect to lose a significant section of Britain's financial services sector. The British investment bank, HSBC, recently declared open support for China's repressive security law in Hong Kong, indicating that global capital is abandoning the West and moving to China. Britain will soon have neither industry nor financial services.

Things are not much better in the EU, which was fragmented by Covid, when each state responded to the crisis individually. Two additional splits then emerged.

An East-West divide developed when Poland and Hungary used the pandemic to disregard the independence of the judiciary and the media. A second split emerged when states like Germany and the Netherlands objected to sharing the coronavirus costs incurred by southern states such as Spain and Italy.

As this column pointed out recently, Germany has further weakened the EU, by refusing to recognise its authority in some legal and financial matters. (Nationalist Ireland has yet to absorb this development.) Britain's departure has added to that weakness.

This may prompt a new EU treaty, preventing other states from following Germany and possibly banning individual countries from holding referenda on EU issues. (Which way will Ireland go on that one?)

Ireland will certainly suffer financially when the true price of the EU's Covid bailout is revealed. It will also be required to increase corporation tax to 15 per cent, thereby undermining its attraction to US companies.

Meanwhile the main focus in the north has been largely on politics rather than trade, which will allow both the EU and the UK to use us as a pawn in their negotiations.

This may try the DUP's and SF's apparent love for each other. But the test of love is to turn a crisis into an opportunity. They can do so by demanding special economic status for the north, with tax and trading concessions from a damaged EU and a devastated UK.

This would allow us to recover from Covid, by operating as a free trade area for, say, the next ten years. We could trade independently with both the EU and the UK, creating opportunities for re-shipment, processing and manufacturing. The least the executive can demand is special status for our main ports.

Covid-19 has changed the world. If the executive could think creatively and exploit that change, we could all celebrate on June 23 every year.

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