The majority of the implications for Ireland of a UK departure from the European Union are negative, but every cloud holds a silver lining, in the eyes of some US business figures.
"It is likely in the long run to be beneficial to Ireland because Ireland would offer the benefits of an English-speaking economy based in Europe, " says Brett Bruen.
A former director of global engagement on the White House's National Security Council, Bruen now advises through his consultancy, Global Situation Room, companies investing internationally.
“I think you will find many companies opting either to set up or reinforce their presence in Ireland,” he says.
Several years ago, the global insurer XL Catlin examined the effects Brexit could have on its business, says Mike McGavick, the company's Irish-American chief executive. Once it looked at the results, it altered its legal registrations to ensure it could move through the EU without the need to get further formal approvals if the British go.
He sees his and other businesses becoming “mobile” and employment in other parts of Europe growing to London’s disadvantage under a Brexit scenario.
XL, headquartered in Dublin, employs 1,360 people in the UK and 45 in Ireland among a 7,000-strong global workforce. McGavick views potential benefits for Ireland should the UK fall out of the EU. “Ireland is an English-speaking gateway to the EU, so to the extent London removed itself from that list, I can see why the Taoiseach observes some pain, but there might also be some gain.”
Dublin
“People looking for that English-speaking footing would have to move Dublin up their list, not down,” he says.
Some economists argue UK-based companies, particularly banks, will relocate to Ireland to keep a foot in the single market. Given the Irish Government’s position that it prefers the UK stays, most State agencies have not banged the Brexit-FDI drum, but some have coyly tapped it.
IDA Ireland says the prospect of Brexit "has caused uncertainty" among some companies in the UK, hinting that it is already trying to exploit this uncertainty: "We are keenly aware of the opportunity here."
The National Treasury Management Agency (NTMA), which sells Irish government bonds, has played up the prospect to foreign investors of a potential FDI payoff for Ireland. In a March presentation to bond buyers, the agency suggested that "some €6 billion of FDI might be attracted to Ireland in the case of Brexit".
If UK-based banks are looking for a new home, the NTMA said, Dublin would be “an obvious choice”, although it said much would depend on London’s post-Brexit negotiations with the EU.
Beneficiary
Employers’ group Ibec warns that British banks would lose their automatic right to regulatory clearance across the EU: “As an English-speaking location in close geographical proximity – and with a similar legal system – Ireland could be a beneficiary,” it says.
Even Ryanair’s Michael O’Leary, who is campaigning heavily for a “stay” vote, concedes Dublin’s financial sector will “do well” if the UK checks out of Europe.
Following its examination of the possible effects of Brexit, the Economic and Social Research Institute (ESRI) found that uncertainty could offer Ireland some gains, but it downplayed their significance.
“On the basis of patterns of the location choice of new FDI projects in Europe over the past 10 years, the expected additional attractiveness of Ireland to new FDI projects is likely to be small,” it said.
Ireland is already an attractive location for FDI companies, given its size and geographical location, so any FDI displaced from the UK is likely to have a greater impact in Germany, France, Italy, and Poland, it found.
Meanwhile, Ibec warns that a UK outside of the EU could become a bigger competitor for FDI, not less, since it would be likely to offer aggressively-crafted tax breaks to offset its lack of EU membership. Equally, it would be free of the shackles of EU state-aid rules.
The Central Bank has warned it could struggle to administer an influx of foreign banks, though former ESRI stalwart Prof John FitzGerald says there is evidence that UK-based banks have already started scouting the Irish commercial property market.
Dublin's office and house market is already tightly constrained. Banking executives from London are unlikely to want to live in Kinnegad or Gorey, unless there are country estates ready for viewing.
