Mr. Roland Freudenstein:

I thank the Chairman for inviting me for a second time. The first time cannot have been that bad. Today I will talk about the possibility, not probability, of the United Kingdom exiting from the European Union. A Brexit would be a very bad idea for Ireland, the rest of the European Union and Britain. For Ireland, it would entail economic costs, hinder the free movement of labour and goods and complicate bilateral relations with the United Kingdom. The UK-Ireland border might well regress to an earlier state. In the European Council voting powers might shift to larger states, the eurozone would become more powerful, while Germany might find itself more isolated. On content, issues such as free trade, completing the Single Market and a strong transatlantic partnership would receive less attention. The European Union's budget might come under severe strain. Efforts to reform traditional areas of spending such as regional funds and agriculture would suffer. Mr. Fabian Zuleeg will go into more detail on this aspect. Strategically, the European Union would become much weaker in its global outreach and the eyes of partners. This is important to all of us. That is particularly true for diplomacy but also for security and defence policies whereby France would become the dominant power.

I will outline why Brexit matters to Ireland. As members know, the United Kingdom is Ireland’s most important economic partner. Some 34% of Irish imports and 16% of Irish exports come from or go to the UK market. The Republic of Ireland has long enjoyed special status for its citizens in the United Kingdom, including the freedom to travel and work without restriction in Britain. Anglo-Irish political, economic, social and cultural linkages are well established, stable and of great importance to both states. I am afraid there would be a risk of a detrimental development in this regard.

As for the decision-making mechanisms of the European Union, voting powers in the European Council would probably have to be redefined. The qualified majority voting procedure would have to be redefined owing to the loss of 29 votes, 8.5% of the weighted votes, which would have a considerable effect on the balance of power. A Brexit would increase the power of larger states in the Council. This would happen since the average population size of the remaining EU member states would fall, while the individual power of the larger member states, including France and Germany, would increase. Germany has very often formed ad hoccoalitions with the United Kingdom on particular issues such as trade and the EU budget. Given that this would no longer be possible, Germany would be deprived of an important classical ally. With the coming into force of the new qualified majority vote, QMV, in November 2014, the euro-19 will, in theory, be able to impose rules relating to the EU Single Market on other member states outside the eurozone, making the eurozone much more powerful.

Areas that have always been close to Ireland's interests would suffer as a result of a Brexit. I refer to trade, completing the Single Market, business conditions and the transatlantic economic relationship, specifically TTIP. These areas would find fewer supporters if Britain were to exit from the European Union. Strategically, a Brexit would be a huge blow to the European Union's global standing. France would be left as the only medium-sized European power with a global outreach and aspiration.

The British parliamentary delegation is the third largest group in the European Parliament and these seats would need to be reallocated or eliminated. The socialists and democrats group would be weakened, given that the British Labour Party is such an important delegation within it. While the European People's Party would not lose any member, it would lose a potential partner for ad hocvoting coalitions, given that the European conservatives and reformists in the European Parliament have often voted alongside it. If the British Conservatives were to leave the European Parliament, there would be one less potential ally for the European People's Party.

The proportion of UK citizens in EU institutions has been decreasing for some time. In the event of a Brexit, there would be no new employment of British citizens and those who retire would not be replaced by Britons. Therefore, after some time there would be no British citizens in European institutions. One consequences of this is that the Irish people would be the last remaining native English speakers in the European institutions.