Belfast Telegraph

View from Dublin: Republic's best hope is for a Northern Ireland backstop

Minister for Finance Paschal Donohoe
Minister for Finance Paschal Donohoe
Tanaiste Simon Coveney

By Richard Curran

Finance Minister Paschal Donohoe made the right decision by presuming the worst about Brexit in framing next month's budget. Why go for tax cuts and higher spending increases when things could really start to get hairy by the beginning of 2020?

The temptation to go for some kind of election budget was resisted. Or was it just postponed?

Taoiseach Leo Varadkar effectively fired the starting gun on the next election by saying it would be held in May.

This gives the Government plenty of time to judge what way Brexit is playing out and for Donohoe to introduce some new budgetary measures in the New Year if Brexit goes our way.

If a deal is done on the backstop by January 1, nothing will have changed on the island of Ireland. A two-year transition period will have begun and the EU and UK will start the long difficult process of negotiating their future trading relationship.

This outcome would provide a boost to consumer confidence, the stock market, investment, employment and just about everything else. It would change the political tone and the economic environment going into 2020. Could Donohoe leave himself room in his budget speech next month to flag the possibility of a supplementary budget or additional measures in the New Year, should circumstances around Brexit go better than expected? He most certainly can.

Meanwhile, the situation around how the border might operate after a no-deal Brexit remains highly fudged - and it needs to be. Tanaiste Simon Coveney has gradually and delicately teed up border communities for the idea of some kind of border checks.

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The truth is that anybody who lives close to the border has been aware since the day after the referendum that some kind of checks would be inevitable. The Government has had the difficult task of fudging this issue at home while trying to negotiate the best arrangement possible with the EU. It now appears that the EU will be as flexible as possible, at the start anyway, to ensure there isn't a major political crisis on November 1. It appears nothing will change immediately and then technology and pre-checks will be used for most business traffic. However, there have to be checks somewhere and sometime to ensure the system is working.

Random mobile checks close to but not at the border would help assure Brussels but for how long? The goal for the Irish Government, as confirmed for the first time by Coveney last week, is to reach an agreement with Brussels on the minimum level of checks to ensure the integrity of the single market while not creating political and community tension.

The EU is saying Ireland will not get a legal derogation of the law in the event of a no-deal but Brussels will be flexible on the level of enforcement of the single market. Brussels will want formalised review measures and site visits to ensure the minimum level of checks agreed are actually taking place. So, if there is a no-deal Brexit, the border situation is heading into what I have believed for a long time was inevitable territory. We will agree to a minimum level of checks and every now and again some MEP from France or Germany will stand up in the European Parliament and complain that the Irish border, and hence the single market, is wide open with no checks and massive levels of smuggling.

The Irish Government will then deny this, and ensure there are multiple visible checks in place for the following weeks, until they gradually fade back again. It could become a game of cat and mouse, with Brussels as the cat and Ireland as the mouse.

Sadly, it would end up as a classic clichéd Irish solution to an Irish problem. This is not how the country should be run. But in the event of a no-deal, we may have little choice.

Our best hope remains a Northern Ireland-only backstop.

Belfast Telegraph