The overall competitivity of Irish businesses could be at stake as the UK vote to exit the EU draws closer. By June, when the vote is due, Irish companies doing business in the UK could become 30% less competitive than they were last January.
According to Ibec, Ireland’s largest corporate group, it is likely that a weakening of the sterling against the euro, already in fluctuation since the turn of the year, could make Irish firms around 30% less competitive “through exchange rate movements alone.”
The yet to be decision on a UK exit from the European Union has by now already brought on a weaker British pound, as against it, the euro is now worth around £0.78/0.79 as opposed to £0.69, its value last November. Ibec states that this figure could reach as much as £0.85 before June.
Ibec CEO, Danny McCoy, says: “A UK exit would send Ireland, Britain and Europe into uncharted and treacherous waters. The value of sterling has already fallen significantly; a vote to leave would prompt a further significant depreciation, heaping pressure on businesses trading with the UK. This is in addition to the countless other risks that would arise during and after the period of a negotiated exit. A slowdown in Chinese growth adds to the uncertain international outlook.”
“The UK’s continued membership of the EU is of overwhelming strategic importance to Irish business. As the referendum approaches, it is increasingly important we have a stable domestic political backdrop to ensure Ireland is in a strong position to effectively manage every eventuality,” he concludes.