Welcome to the new version of European Tribune. It's just a new layout, so everything should work as before - please report bugs here.
Display:
I remain unconvinced there will be a huge exodus of actual people to Dublin, so infrastructural shortcomings may be moot. Most financial services operations these days are almost location independent.  The regulators will require that the key decision makers are working from Dublin, but that doesn't stop them just living in Hotels here 4 nights a week. A high profile front office in a key location will suffice.

What probably will transfer to Dublin is large assets on balance sheets distorting our GDP figures still further. Perhaps more profits will be declared here boosting our Corporation tax take, but that could be the height of our benefits.

What no one is talking about is all the smaller and medium UK businesses in other industries which require access to the Single Market for either their inputs or sales. They are probably taking a more "wait and see approach" because shifting plant is no trivial exercise and they don't have the same corporate planning resources in any case.

However I could see a real panic developing if a hard Brexit takes place and tariff and non-tariff barriers are set up particularly in high tariff industries like food. Some very rapid re-locations of some parts of UK businesses to Ireland and Irish Businesses to UK could be required to facilitate continues market access and reduced tariffs.

Ireland would be ideally placed to pick up such smaller businesses as many may not have much in the way of foreign language skills.  Also there is no need for them to be located in the greater Dublin region, so infrastructural constraints need not apply.

There is a lot of under-utilised labour and facilities capacity in more rural Irish towns which could benefit a lot from even a 50 job business moving in.  US FDI has been primarily large, knowledge intensive industries requiring access to large skilled workforces that can only be found in large urban centres. Smaller UK FDI in non-financial industries could have a proportionately far more beneficial social impact even where their contribution to GDP isn't very significant.

.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Oct 18th, 2017 at 11:03:42 PM EST
[ Parent ]
300 NEW! quants per financial institution creates the probability of 15,000 jobs. See, the quants gotta eat and drink, too. They gotta have proper housing, housing in the manner to which they are accustomed. They gotta have transportation, transportation in the manner to which they are accustomed. And the gotta have "cleaner"; they are not accustomed to cleaning up after themselves.

Is this all "menial" work? You betcha! Do you object to this prospectus, because it is menial work? Say, so. Tell us how Ireland's society will resist centuries of traditional "service economy".

Diversity is the key to economic and political evolution.

by Cat on Thu Oct 19th, 2017 at 06:50:22 PM EST
[ Parent ]
I hope Ireland is getting out in front of this so it doesn't end up with a bunch of brass plates and no operations.
by rifek on Thu Oct 19th, 2017 at 07:25:39 PM EST
[ Parent ]
I remain unconvinced there will be a huge exodus of actual people to Dublin
The EU27 will not accept mailbox companies to gain access to the internal market on financial services. There can be no functions performed from the UK on behalf of an EU27 subsidiary.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Fri Oct 20th, 2017 at 09:31:03 AM EST
[ Parent ]
Gradually yes, back office functions will have to move.  But there seems to be a degree of regularity arbitrage going on whereby some regulators are offering "light touch regulation" in return for for initial competitive advantage.

Irish politicians are particularly worried about Luxembourg and Amsterdam in this regard. Call it a loss leader promotion. I have no doubt the EU will ultimately clamp down on all "brass plate" operations.  The key is to get your foot in the door, and then gradually tighten the screw if I might mix all sorts of metaphors.

My point is that any staff migration will be gradual and incremental and won't unduly stress infrastructures which are in the process of being upgraded anyway. The Irish building industry is gradually building up to boom volumes from a low base.

10,000 additional jobs in a city of over a million isn't a drop in the ocean, but it isn't transformative either.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Oct 20th, 2017 at 04:25:51 PM EST
[ Parent ]
The German FAZ daily newspaper in August published an article about a study trying to determine the number of new jobs resulting from Brexit in Frankfurt.

The study assumed 10,000 bankers relocating to Frankfurt.
The conservative scenario "guessed" that 11,000 additional jobs would be created in Frankfurt alone and an additional 14,000 in the Rhein-Main region.
The optimistic scenario was 24,000 jobs in Frankfurt and an additional 50,000 in the region.

That of course depends on which jobs are relocated. Do the families move as well? In which time period? And so on...

by Detlef (Detlef1961_at_yahoo_dot_de) on Sat Oct 21st, 2017 at 06:11:54 PM EST
[ Parent ]
Moving the jobs doesn't mean moving the people who hold the jobs.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Nov 8th, 2017 at 11:53:10 AM EST
[ Parent ]
However I could see a real panic developing if a hard Brexit takes place and tariff and non-tariff barriers are set up particularly in high tariff industries like food. Some very rapid re-locations of some parts of UK businesses to Ireland and Irish Businesses to UK could be required to facilitate continues market access and reduced tariffs.

Unless the UK stays in the single market border controls are almost unavoidable. The UK is then a "third party country" and regulatory conformity is then only a necessary but not sufficient condition for imports to the EU.

Search "Veterinary border inspection posts". They are tasked to inspect "live animals" and "products of animal origin". For imports from third party countries that is the point of entry to the EU.

Ireland right now has three of them. Shannon airport, Dublin airport and Dublin harbour.
https://ec.europa.eu/food/sites/food/files/animals/docs/bips_contact_ireland.pdf

Ireland would need additional ones along the border to Northern Ireland.

And while obviously there are more in continental Europe (France, Belgium, Netherlands and Germany) they don´t have the size either to inspect British exports to the EU after Brexit.

Something that neither the British government nor the British farmers seem to realize.

And the EU can´t make an exception for the UK because if they do, they would have to relax inspections for WTO members too. WTO non-discrimination rules.

by Detlef (Detlef1961_at_yahoo_dot_de) on Fri Oct 20th, 2017 at 02:27:26 PM EST
[ Parent ]
Revenue says post-Brexit Border will need eight customs checkpoints
A possible option is an e-flow-style automatic number plate recognition (ANPR) system that would allow vehicles carrying goods to move from the Republic to the North and vice-versa without having to stop in cases where a pre-departure/arrival declaration has been lodged and green-routed, it suggests.

For such a system to work with it would require an interface between both countries' electronic systems, the report adds.

Whether such a system can be commissioned and installed in time is not known but Revenue says an analysis must be conducted to establish the cost and the practicalities of such before proceeding.

It also says clarification would be required from the European Commission as to what extent a camera-based system could be considered to meet this requirement.

It adds: "In any event, a physical customs presence would still be required to engage with legitimate traders and to meet a range of EU obligations.

"Regardless of any efficiency arising from an ANPR system, the inevitability of certain consignments being routed other than green and goods or documents having to be examined would still require investment in suitable facilities at all designated crossing points."



Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Oct 20th, 2017 at 03:56:14 PM EST
[ Parent ]
I´m a tiny bit skeptical.

From what I´ve read the UK before Brexit was already in the process of developing and introducing a new system for customs transactions. I think the goal was to boost capabilities from 60 or 90 million transactions per year to 150 million. And of course it was planned long before the referendum with EU tariffs and regulations in mind. Estimates seem to say that after Brexit Britain will need a system with a capacity of 300 to 350 million transactions per year.

The British will have to change their not-yet-ready system on the fly. And given what I know of government IT projects in Germany, I would expect the project to be late and wastly more expensive than planned.

And of course the system needs to be compatible with the Irish system. We´ll also need a whole new system of identifying regular "trusted traders" who can use the system. How to deal with tariffs and VAT. How to avoid VAT fraud.
And even assuming the ANPR works as advertised, how do you control the rest of the border?

And I think the problem with farm animals was only mentioned (partly hidden) in:

"Regardless of any efficiency arising from an ANPR system, the inevitability of certain consignments being routed other than green and goods or documents having to be examined would still require investment in suitable facilities at all designated crossing points."

Veterinary border inspection posts for the inevitable examination of animals or products of animal origin are still necessary. And that would hurt Ireland quite a bit.

by Detlef (Detlef1961_at_yahoo_dot_de) on Sat Oct 21st, 2017 at 06:45:20 PM EST
[ Parent ]
Ireland could attract trillions in financial contracts post-Brexit
Ireland may become a jurisdiction for trillions of euro of financial contracts, covering everything from currency to fuel and interest-rate hedging agreements post-Brexit, under a plan being considered by a global body overseeing this market, The Irish Times has learned.

This would deliver a boon for corporate law firms in Dublin and potentially add to the International Financial Services Centre's (IFSC) attraction as a base for global financial activities.

Most international financial derivatives contracts - crucial to the functioning of the modern economy as they allow businesses manage various risks and costs - use standardised documentation from the International Swaps and Derivatives Association (ISDA), drawn up under either English or New York law.

However, an association communication to members in recent weeks, seen by this newspaper, says that it is looking at Irish and French law as alternatives to English law for European derivatives contracts.

I suspect that a decision to use Irish or French law for financial contracts post Brexit - instead of UK or New York law - could be the single most important influence on where most of the financial services departing London will end up.

I suspect the Irish judiciary may not have a huge amount of expertise/experience in deciphering the code around complex financial instruments, but the fact that the contracts would still be in English would be a considerable advantage.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Oct 20th, 2017 at 06:14:48 PM EST
[ Parent ]
And of course the Irish common law system is very similar to the UK one.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Oct 20th, 2017 at 06:16:18 PM EST
[ Parent ]
Careful what you wish for. If Ireland absorbed the City, the next crisis would devastate the country.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi
by Cyrille (cyrillev domain yahoo.fr) on Sat Oct 21st, 2017 at 07:09:04 AM EST
[ Parent ]
Irish law being similar to English law is a big plus for using it for financial contracts. Other than that, Luxembourg law seems the natural choice to me because Luxembourg is already a microstate focused on finance and law. But French law? No.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Migeru (migeru at eurotrib dot com) on Wed Nov 8th, 2017 at 12:04:51 PM EST
[ Parent ]

Display:

Top Diaries

The Brexit effect

by Frank Schnittger - Oct 25
20 comments

A Trip to the Woodshed

by Cat - Nov 3
20 comments

Catalonia?

by Frank Schnittger - Oct 28
17 comments

Occasional Series