Elizabeth Sorrell
Last Monday, the European Commission confirmed that it will be sending the Republic of Ireland €920.4 million as a result of Brexit. Ireland is the first country to receive funding from the European Commission as part of the Brexit Adjustment Reserve.
What is the Brexit Adjustment Reserve?
The Brexit Adjustment Reserve (BAR), is funding that will be allocated to EU member states who will feel the brunt of Brexit. The current amount available in the reserve is €5.4 billion and the European Commission will take into account the various affects on trade and specific industries in order to cushion the economic impact of Brexit on remaining EU member states. Ireland is the largest beneficiary of this initiative given that the largest direct impact will be on the Irish economy.
The Commissioner for Cohesion and Reforms, Elisa Ferreira, explains Brussels’ decision to allocate this package to Ireland:
“Brexit has had a negative impact on many people’s lives. Within the EU, it is the people in Ireland who will feel it the most. […] The funding that Ireland will receive will contribute to improve living standards, support economic growth in the country and mitigate the negative impacts in local communities.”
The European Commission determines the amount each member state will receive through three principal factors. The first is trade (this is where the bulk of the money comes from), fish caught in the UK’s EEZ (Exclusive Economic Zone), and maritime border regions in the UK.
80% of the resources will be distributed in pre-financing, meaning that the transfer will be made before any expenditure is formally approved. This proportion of the money will be divided into three portions which will be dispersed in installments until 2025, by which point the remaining 20% will be available with the consideration of previous expenditure and unused amounts.
By the end of 2021, Ireland will receive the first installment of €361.5 million to cover the expenses of Brexit since 1 January 2020.
Anglo-Irish Relations During Brexit
Questions surrounding trade and border controls between the UK and Ireland have been a major concern throughout Brexit negotiations. In the Chequers’ Plan of 2017, former PM Theresa May laid out the UK’s exit from, and future relationship with the EU, in which a priority would be to maintain the “strong and historic ties with Ireland” and to keep the Common Travel Area.
Both the UK and EU agreed on the importance to committing to the 1998 Good Friday Agreement which involves a soft border between Northern Ireland and the Republic of Ireland. However, due to the rift in trade standards between the two countries, it is much more difficult to draw the line with regards to the importation of goods and services across the border.
This is because Northern Ireland must adhere to UK standards of trade while the Republic adheres to those of the EU. Many goods such as meat and eggs that enter Northern Ireland through Great Britain undergo checks in Northern Irish ports before moving across the Irish border.
As a result, there is criticism that a de facto hard border now exists in the Irish Sea. While a possible solution for the UK would be to invoke Article 16 of the Good Friday Agreement to withdraw from difficult trade agreements, the EU may impose higher trade tariffs in response to future transactions.
In 2019, Boris Johnson promised that his Brexit deal would not create any checks in moving goods from Great Britain to Northern Ireland. Brexit Minister, Lord Frost, proposed to remove current checks and distance the European Commission and European Court of Justice from these transactions.
Trade is just one aspect of the effect that Brexit has had on the relationship between the UK and Ireland. However, the aim of the European Commission is to cushion the impact of Brexit on the Irish economy as effectively as possible.
It is difficult to say how Brexit will socially and politically affect local communities in both Northern Ireland and the republic. But perhaps economic compensation for Ireland will not exacerbate existing tensions between the two countries.
Featured image courtesy of Christian Lue on Unsplash. No changes or alterations were made to this image. Image license can be found here.
