To brexit or not to brexit is a question for the people of the UK next month. There is, however, an even more fundamental question for all Europeans: what sort of Europe do we want and how do we attain it? Inevitably, the short-term questions and concerns regarding trade, investment, employment, migration and regulation of economic activity will drive the debate around Brexit and these matters impact all Member States in the European Union. Recently, the NERI held a joint seminar with the Queen's University Belfast Management School on the Economic Implications of Brexit. My NERI colleague, Paul MacFlynn, completed a NERI working paper on the topic which is available here . A presentation by Dr Edgar Morgenroth made at the seminar is based on a report which he and other researchers published late last year (Scoping the Possible Economic Implications of Brexit on Ireland ). Previously, I have written a Monday Blog on the topic of Brexit (Thinking Aloud about Brexit). Here, below, is the text of some concluding remarks I made at the recent NERI-QUB seminar on Brexit:
This has been a timely event in light of the crucial questions raised in the debate about a proposed exit of the United Kingdom from the European Union. While the matter is, clearly, a decision for the people of the UK as a whole it is appropriate that economists bring their perspectives to the debate in which many difficult questions and unknown consequences of remaining in, or leaving from, the European Union are considered.
The role of the Nevin Economic Research Institute is to provide factual information in relation to the possible risks of EU membership or departure. It is not our role to advocate or advise on how the people of the UK should vote. The matter is of keen interest to people living in the Republic of Ireland as well as other EU member states. The question of Brexit could have profound implications for the all-island economy momentum evident in recent decades not to mention that other matter of the Scottish question.
Based on the evidence reviewed by my colleague, Paul MacFlynn, in his working paper The Economic Implications of Brexit for Northern Ireland which is available as of today on our public website we do not find any convincing evidence that Brexit would benefit Northern Ireland economically in the short to medium term whether in terms of employment, investment or trade. This is especially so in light of the rather different and, as Paul as pointed out, unique structure of employment and economic activity in Northern Ireland as a peripheral UK region with its high exposure to the EU not least in area of food manufacturing and goods exports to the Republic of Ireland and the only UK region with a land frontier with the rest of the EU. If anything, the evidence points to risks that trade, investment and employment would be adversely affected in the event of a Brexit.
That said, the economic risks of staying in the European Union for all member states including the UK must be recognised. Economists deal in risks and not in certainties. Some of the risks not spoken about so much in the various debates so far concern the ways in which EU rules bind member states in terms of austerity-biased fiscal policy as well as constraints on member states in policy discretion in areas such as reversal of privitisation or matters arising from transatlantic trade and investment agreements such as TTIP which is a supra-national European competence. Being a member of a large and relatively prosperous club such as the European Union carries with it benefits as well as constraints and, in its own way, risks foreseen and unforeseen.
Therefore a balanced and informed debate is necessary on all aspects of the proposal including those areas that we, as economists, are not perhaps as competent as others to comment on including issues concerning social legislation and question of geo-political sensitivity at global level.
Whatever the outcome of the referendum on 23rd June we will still be left with the question that faces all Europeans: what sort of a Europe do we want for ourselves and our grandchildren? For those of us who aspire to a ‘social Europe’ (whatever that term might exactly mean) we must wrestle with the reality that Europe is bigger than the European Union and reform of the European Union is a long-term project in which the outcomes are far from certain. I thank you for your interest in attending and participating today and I look forward, as Director of an all-island research body linked to the trade union movement to continuing collaboration with the Management school and other research bodies in Northern Ireland.