After the initial shock of the EU referendum subsided last year, Ireland’s political and business leaders began focusing on the opportunities Brexit could deliver, with Dublin touted as a new “Canary dwarf” luring thousands of banking jobs from London.
Around 18 months on, the thorny issues of the border with Northern Ireland and the potential disruption Brexit will cause to Irish exports are also looming large. On Friday though, Ireland’s deputy prime minister calmed fraying nerves by saying he thought a border deal was “doable”.
Competition with other EU cities to attract City jobs is intensifying. Earlier this month, Dublin lost out in the contests for the relocation of the EU’s banking and medical regulators from London, to Paris and Amsterdam, respectively.
Dublin has also chalked up some wins, with US companies Bank of America, Citigroup and JP Morgan planning to expand their operations in the Irish capital, with other insurance and financial services firms opting for the city, moves that should generate several thousand new jobs.
Kieran Donoghue, head of international financial affairs at the IDA Ireland, which is responsible for foreign investment in the country, said it has attracted “15 to 20 companies where investment has a Brexit dimension”. Another 30 groups are in the pipeline “advising us of their intention to invest in Ireland”, Donoghue added.
He said companies had been sending over teams to check out Dublin’s schools and housing, as well as office space, although he admitted that firm commitments was a slow process.
Ireland’s ability to lure businesses has been jeopardised by the housing crisis, caused by the financial crash and International Monetary Fund bailout in 2010.
New rules forcing restrictions on credit during the banking collapse have put a squeeze on construction and left limited accommodation for high-rolling executives.
Dublin was rated recently one of the worst cities in the world to emigrate to due to the lack of affordable housing and the high cost of living.
ExPat City Ranking put it at 47th out of 51 cities in a survey of almost 13,000 respondents, although this was two spots ahead of Paris.
However, Donoghue pointed to new luxury blocks being built on Dublin quays, which are already being snapped up by international investors.
Ken Owens, leader of Brexit financial services at consultancy PwC in Dublin, said that by the time the Brexit deal and transition period is over the number of companies that have moved to or expanded their Irish operations “should be in the hundreds”.
“A number of firms are asking very specific questions as they refine what they want to do in terms of the exact activities and people and roles they want to put into Dublin,” Owens said.
Donoghue added that the vast majority of companies looking at Dublin were now “working on the assumption that there will be a hard Brexit” given the “volatility” of the political situation.
Owens said he was seeing the same trend, with more and more firms in “implementation mode regardless of where Brexit ends up”.
It is understood that between 70 and 100 foreign banks and financial services companies have been in talks with the Irish banking regulator since last June. Some of these are American firms looking for an EU base away from London. Life sciences, technology and law firms are also sizing up office space in Dublin.
Since June 2016, 1,317 lawyers from England and Wales have registered for the Roll of Solicitors in Ireland, in what the Law Society described as an influx of “Brexit refugees”.
All five of the “magic circle” big commercial law firms in the City of London have registered hundreds of solicitors in preparation, including Eversheds Sutherland (132), , Freshfields Bruckhous Deringer (130) and Slaughter & May (79).
According to a survey by Smith & Williamson, 44% of the top 20 law firms in Dublin have been approached by British counterparts in the past 12 months “with a view to possible merger, acquisition or strategic representation”.
However, as the only EU country with a land border with the UK, and with most of its exports to the rest of Europe travelling via Britain, Donoghue admitted that the IDA and other Irish government agencies had to deal with the fact that overall the negatives of Brexit far outweigh the positives gained from generating a few thousand jobs in Dublin.
“From an IDA perspective, we are redoubling efforts to try to part-compensate for the negatives,” he said, as he prepared for a trip to Asia to drum up business.
The Irish government has a Brexit strategy, overseen by the taoiseach, Leo Varadkar, and the department for foreign affairs, directing the national effort to try to mitigate the Brexit fallout.
Businesses across Ireland are being urged to attend workshops or phone a hotline to get practical tips on how to operate under World Trade Organisation tariffs and get discounted export certificates to the UK, in the event that Britain leaves the EU with no trade deal.
On Tuesday, 400 small businesses will attend a workshop at Croke Park stadium in Dublin offering “practical help to navigate Brexit” as part of a national campaign.
“If you are a yoghurt manufacturer, you can think about reducing the sugar content of your product and reduce your tariff exposure,” said Aidan Gough, strategy and policy director at InterTradeIreland, who is organising the workshops.
“If you export fresh apples you will attract a 7.2% tariff, but if you switched to dried apples you can halve that exposure to just over 3%.”
InterTradeIreland has calculated that the cost of rules of origin documents could finish off some businesses – Gough says a bakery operating on the border with Northern Ireland faces a bill of £700,000 a year for 100 deliveries a day criss-crossing the border.
“The challenge is immense. Crossborder trade has more than doubled since the Good Friday agreement [in 1998] and it’s very important those businesses continue to operate,” said Gough.
guardian.co.uk © Guardian News and Media Limited 2010