Mr. Eddie Casey:

I will take that one. I cannot give the Deputy exact estimates because we do not have them. The estimates produced by the Department in conjunction with the ESRI were using a COSMO model. It considered a range scenarios from a soft Brexit to a hard Brexit but there are a few problems with the central scenario that the Department uses for its medium-term forecast, which are for the hard Brexit in that the COSMO model assumes several things. One is that the impact on the UK is basically the same as any other trading partner, so it is as labour intensive in terms of exports to the UK as it is in terms of exports to the Maltese economy, Luxembourg and to any other member state. We know there are much greater connections between the UK and Ireland and the labour intensity of these relationships is much greater. An exporter from Ireland to the UK tends to employ many more than a exporter to much more distant locations involved in, for example, the pharma industry.

That is one impact that could lead to greater effects on the economy if it not accounted for correctly. COSMO, the ESRI structural econometric model of the Irish economy, by its nature of simplifying assumptions does not do that.

There is another possible area where the impact could be greater. COSMO tends to have a smooth impact on growth and the economy's shock from this. We know from examining other cases of countries dis-unifying or splitting up and having to export in future that often the impacts can be very non-linear and can happen very quickly or overnight. That is another area of concern.

It seems that exchange rate impacts were not taken into account in the Estimates produced for the Department as well. This could lead to additional negative impacts, but possibly not as severe as we might think. This is because exporters in the UK are subject to greater costs. Potentially, the competitiveness effects in Ireland are not as great as one might expect.

There are other downside risks but there are great uncertainties in both directions. We know that a hard Brexit might not be the actual outcome and that a soft Brexit is possible as well. There is considerable uncertainty.