Event Report: “Brexit, the Irish Economy and the Future of European Fintech”
On 16 September 2019 the Brexit Institute, in cooperation with Dublin Airport Central, has hosted an event on “Brexit, the Irish Economy and the Future of European Fintech”. The event, opened by Dalton Philips (CEO of Dublin Airport), Brian MacCraith (President of DCU) and Federico Fabbrini (Director of the Brexit Institute) was heavily attended and featured a Keynote speech by Pascal Donohoe (Minister for Finance of the Republic of Ireland).
The Keynote has been the occasion to comment on the future relationship between Ireland and the United Kingdom in light of the ongoing Brexit developments: in particular, the Minister stated that Brexit is a process with an undefined outcome and that it will rebuild the relationship between Ireland, the UK and the EU. After quoting the 1946 speech of Winston Churchill on the United States of Europe, the Minister pointed out that Brexit will not end if the UK leaves on 31 October: instead, – he said – we are just entering a new phase.
Without a deal – continued the Minister – most of the challenges resulting from Brexit will remain the same. With a deal, years of negotiations will follow in order to declinate its terms. For the Minister, the first point on the agenda will be ensuring the rights of EU citizens, together with finding a solution to the border with Northern Ireland. However, in case of a No-Deal, the UK will need to come to the table as a third country, and there will not be a transition period. This Brexit phase is accordingly just a small part of a longer process.
When the UK leaves the EU, there will be a divergence of interests
The challenges and opportunities for Ireland under the current situation have been determined by the choice of the UK to diverge from the EU path. This will be translated – according to Mr. Donohoe – in clear implications for Ireland and for the Good Friday agreement.
In the words of the Minister, Ireland should work with its partners to maintain a focus on the productive capacity of the economy and continue to invest on politically sensitive infrastructures, as ports and airports. Brexit leaves challenges and opportunities that are interesting in the long term, although the Irish government is now focused on what is going to happen in the next months. The Minister also described the efforts made by the Irish government to redistribute through public spending the results of the substantial economic growth of the last years. A considerable amount of these resources has, according to the Minister, been employed to prepare companies and small businesses to develop new skills to face the challenges posed by Brexit.
Preparing Brexit, safeguarding peace in Northern Ireland and reinforcing EU partnership
In order to be prepared for October 31, the Irish government is taking different measures, explained in details by the Minister. As a first step, delivering the appropriate budgetary strands in Budget 2020. Second, safeguarding peace in Northern Ireland, and third, developing new partnerships at EU level.
The Minister focused in particular on the border with Northern Ireland, and mentioned the backstop in several passages. According to the Minister, UK and EU agreed on a backstop to address the unique circumstances of Northern Ireland. The first clause of the backstop reaffirms the principle of consent and the second clause reaffirm the territorial integrity of the UK.
He then focused on the commitment of Ireland to an ever closer European Union. In his words, membership to the EU and the Single Market is a core part of Irish economic strategy and has greatly benefit Irish economy. He also pointed out that the capacity of Ireland to make the most of the Single Market will depend on the influence towards the other Member States: for this reasons, he explained, his government has interacted mutually beneficial relationships with other Member States, as in the Hansa (the “New Hanseatic League”) partnership with the Netherlands and other Baltic countries.
In the last part of his Keynote, the Minister underlined that the EU is best example in the world of conflict resolution, and recalled how the EU has not just helped to bring peace in Europe, but also in Ireland. If the UK prepares to leave, he concluded, this will be another time of history where the paths of Ireland and of the United Kingdom diverge.
The Future of Fintech (Panel Discussion)
After the Keynote, the event continued with a Panel Discussion on “The Future of European Fintech”, chaired by Samantha McCaughren (Sunday Independent) and featuring a debate between Mark Harris (AIB), Deborah Hutton (Evershed Sutherland), Lory Kehoe (ConsenSys) and Pierangelo Rosati (DCU). The discussion sharply shifted from a general introduction on the future of Fintech to commenting pressing and up-to-date issues, as cryptocurrencies, blockchain technology and their regulatory perspectives.
Deborah Hutton, in particular, expressed concern for the UK leaving the block, as the country remains one of the leader in Financial Technology. She also showed preoccupation for the possible approach to innovations in the financial sectors by other European regulators. Lory Kehoe, after explaining briefly the disruptive impact of blockchain technology and the functioning of smart contracts, stressed the importance of the development of blockchain technology not just for the future of the financial sector but also for governments. Pierangelo Rosati, in his intervention (anticipated in our blog), pointed out that the main challenge for the UK after Brexit will be to continue to attract the talents needed to the development of financial innovations. Mark Harris (AIB) also extensively commented on the role of technological innovations in the future of financial services, but warned that blockchain technology is just a part of the bigger picture. He concluded however that he thinks that Ireland is well placed to be successful in Fintech. The Panel Discussion was followed by a lively debate with the public in the room with questions on blockchain technology and innovations in the financial sector.