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Irish central bank favors early 'Brexit' vote
January 26, 2016 / 4:26 PM / 2 years ago

Irish central bank favors early 'Brexit' vote

DUBLIN (Reuters) - It would be beneficial for Ireland if neighboring Britain held its referendum on European Union membership as soon as June so Ireland could prepare for any adverse impact on its economy, its new central bank governor said on Tuesday.

Union flags and the Big Ben clocktower cover notebooks are seen on sale in London, Britain, Thursday December 17, 2015. REUTERS/Luke MacGregor

Ireland has more to lose than other EU members if its larger neighbor, a key trading partner, votes to leave the union at a referendum due to be held by 2017 and the Irish government has been a vocal opponent of a British exit, or “Brexit”.

With analysts seeing the key risks to Ireland’s fast growing economy coming from external rather than internal factors, Philip Lane said one of his chief concerns with a “Brexit” was that it is difficult to plan for.

“The emerging possible risks about Brazil, about China and so on are that, they are emerging. Whether they really shake the world economy is open to question,” said Lane, who is also a member of the European Central Bank’s governing council.

“With China and so on, we more or less know the nature of the risk. The issue with ”Brexit“ is, there are so many scenarios after that.”

The government has identified a “Brexit” as a major strategic risk to the recovering economy and the central bank warned last month that withdrawal would hurt Irish exports, employment, economic growth and significantly impact the country’s financial sector.

A government-commissioned report estimated that trade between the two countries could fall by at least 20 percent if Britain left the 28-member bloc.

“It would be good if they had the referendum in June so either way, we know what we’re dealing with,” Lane told a parliamentary committee.

Britain will start a renegotiation of its ties with the EU next month.

“I think I‘m definitely on the side of those who say the cumulative impact on Ireland would be quite adverse. It is something we do not wish for, at least from an economic and financial perspective, let alone the politics. I would hope that the vote is taken quickly and they vote to stay in.”

Editing by Raissa Kasolowsky

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