“Hard Brexit” Speech from Britain’s PM Prompts Concern from Irish Food Industry and Expected Market Volatility

17 Jan 2017 --- The markets are expected for a volatile day and the Irish food and drink industry has made a plea to protect its businesses ahead of a speech today by Britain’s prime minister Theresa May, which is expected to underscore the government’s commitment to a “hard Brexit” and the exiting of the European single market and customs union.

The value of the pound was up against the US dollar at $1.21 but slightly down against the Euro €1.13 while a day of market turbulence is expected as traders respond to May’s comments on the country’s future relationship with the EU.

May is expected to say: “I want us to be a secure, prosperous, tolerant country - a magnet for international talent and a home to the pioneers and innovators who will shape the world ahead.”

“I want Britain to be what we have the potential and ambition to be: a great, global trading nation that is respected around the world and strong, confident and united at home.”

She will add that the UK does not want “partial membership of the European Union, associate membership of the European Union, or anything that leaves us half-in, half-out.”

She will add: “We do not seek to adopt a model already enjoyed by other countries. We do not seek to hold on to bits of membership as we leave.”

“The United Kingdom is leaving the European Union. My job is to get the right deal for Britain as we do.”

However, those in the UK food industry concerned about the implications of a hard Brexit will have received some succour from comments this week from president-elect Donald Trump who has promised a quick trade deal between the US and the UK after he takes office later this week.

Ahead of May’s speech, Food and Drink Industry Ireland (FDII) has called on the Irish Government and the European Commission to put in place a comprehensive package to protect viable businesses and jobs during a potentially fraught Brexit process in anticipation of the increased likelihood of a hard and disruptive Brexit.

A significant number of the 600 food companies in Ireland have exposure to the UK, through exporting meat and dairy to the UK.

FDII Director Paul Kelly said: “The Irish agri-food and drink sector is uniquely exposed. There is a compelling case for exceptional state aid support to minimise the economic fallout and job losses. Already the currency squeeze is putting intense strain on exporters.”

“This pressure is likely to intensify as the challenges and economic costs of a hard Brexit crystalise. The hardening of EU and UK negotiating positions mean we must plan for a very difficult Brexit process and the high possibility of a divisive outcome.”

FDII has published a report calling for state aid support across three areas.

• Enterprise stabilization: Short term measures to allow the Irish Government to introduce enterprise stabilization measures, as happened in 2009 during the economic crisis.
• Investment in competitiveness: Medium term measures to allow the Irish Government to introduce investment aids to support Irish food and drink companies invest in enabling technology, plant renewal and expansion, refinancing, market development and innovation to regain competitiveness following single market fracture.
• Diversification: Trade related measures, include export financing and export credit guarantees, to support the continued development of international export markets.