Just as a panel of attorneys in Atlanta was addressing Brexit’s implications for the Irish economy Thursday, news came in that the British parliament had rejected the prospect of a second referendum.
The day before, lawmakers had voted down the exit deal struck with the European Union, and a day later, they would they decide that the U.K. should postpone its March 29 departure to buy more time to reach a better agreement.
This moment-by-moment drama is indeed one reason Irish officials used the run-up to St. Patrick’s Day in Atlanta to hammer home to potential investors their country’s “secure” place at the “heart of the European Union.”
“It is very disturbing to see what’s going on for all of us, because we don’t know which way it’s going to go,” said David Stanton, Ireland’s minister for equality, immigration and integration, who keynoted an investment event at Miller & Martin PLLC.
Indeed, much of this is uncharted territory: Even if the U.K. votes to extend the deadline, the EU has to agree to do so. Otherwise, the U.. could face “crashing out” of the European Union with no deal, which some see as potentially disastrous for its economy.
The uncertainty has created a “silver lining,” albeit one that Ireland never wanted, Mr. Stanton said. More than 50 companies — mostly in financial services — have already relocated to Dublin from London, hedging against a dramatic U.K. exit from the EU that would leave their European operations in limbo.
When the U.K. leaves, Ireland is to become even more of a gateway for U.S. companies to the EU, as it will be the only remaining English-speaking, common-law country in the bloc of more than 500 million people.
The country also boasts a young, diverse workforce — with one in six people in Ireland having been board abroad. Technology companies like Facebook and SalesForce are creating thousands of jobs, and life sciences and financial firms are investing heavily.
Brexit jitters may have contributed to a record number of projects in 2018 — 265 investments from 134 new companies — but these aren’t necessarily ones companies relish making, said Emma Mitchell, vice president for technology, consumer and business services at IDA Ireland’s Atlanta office.
“The feedback [from companies] is that there is no positive to Brexit. To them, it just represents cost and disruption,” she said.
That’s why there’s no schadenfreude on the part of Ireland, which sees Brexit as a mistake with potentially dire consequences, even though the country has hedged its trade relationships and now exports more to the U.S. than the U.K. More than 550 U.S. companies employing 160,000-plus people also help soften the blow.
“Brexit will be bad, in my view, for the EU, it will bad for Ireland and I think it will be also bad for the United Kingdom itself. It threatens to undermine the gains of the Good Friday Agreement, and it’s putting a strain on our bilateral relationship with the U.K. But we are working very, very hard indeed on this issue. It has taken up a huge amount of my government’s attention, energy, time and funding — a huge amount in the last two years,” Mr. Stanton said.
A central sticking point in negotiations has been the debate over what to do about a border between Northern Ireland, which is a part of the U.K., and the Republic of Ireland. Mr. Stanton said the border has become largely invisible under the EU regime, and to change that could create a target for those who would seek to undermine a fragile peace that has taken hold for 20 years following the end of the so-called “Troubles.”
Ireland has much more going for it than being a Brexit refuge, said Claire Lord, an attorney with Irish law firm Mason Hayes & Curran.
Setting up a corporate structure there is similar to the U.S., and it takes at most five days after the receipt of signed incorporation documents to officially form a company.
For companies committed to putting some management in Ireland, the country can be a powerful European beachhead. It’s favorable for managing the EU-wide General Data Protection Regulation, or GDPR, given that companies deal primarily with the regulator in the country where they’re locate, Ms. Lord said.
“We have a proportionately informed and interested regulator,” she said, noting that this is generally true of the country. “Our small country is great for big business.”
Her colleague David Mangan from Mason Hayes & Curran provided a deeper dive on Brexit, concluding that there is far too much still unsettled to make any predictions on the future.
“At this stage of the process, we though we would be much further down the road with regard to the details,” he said. “There are big unanswered questions to be answered within 15 days.”
Those include how Irish food exports would be affected in the event of a no-deal Brexit, how a loose agreement on mutual residency of citizens will shake out, whether judgments reached in the U.K. will be enforceable in other countries and many more.
Miller & Martin international practice attorney Joe DeLisle moderated the panel discussion. Irish Consul General Shane Stephens introduced Mr. Stanton, who spoke at the Irish Chamber of Atlanta St. Patrick’s Day breakfast Friday before heading down for the parade in Savannah Saturday.
Just before he arrived this week, a delegation of eight Irish fintech companies touched down in Atlanta to meet with investors, potential customers, officials and other members of the city’s payments ecosystem.