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Irish government united on issue of border despite growing political rifts, finance minister says

  • Irish Finance Minister Paschal Donohoe told CNBC Monday that the country's mandate on the issue of the border with Northern Ireland has not changed
  • The 500 kilometer (310 mile) border between Ireland and its northern neighbor remains a highly sensitive issue
  • It has been a tense week for the Irish Republic, with main opposition party Fianna Fail on Friday submitting a motion of no-confidence in Deputy Prime Minister Frances Fitzgerald

Irish Finance Minister Paschal Donohoe told CNBC Monday that the country's mandate on the issue of the border with Northern Ireland has not changed, despite growing political uncertainty within the government following a no-confidence motion on Friday against Deputy Prime Minister Frances Fitzgerald.

His government's position, which he says all Irish political parties agree on, is that no hard border should be established and that a customs union be maintained between the Republic of Ireland and the Northern Irish province, with whom it has crucial trade ties.

"We're putting this position forward because we believe it is in the national interest of Ireland and it offers the best prospect for continued economic progress and stability on our island," Donohoe said.

"The reason why we believe it is very very important that we have a customs policy moving forward, that is as close as possible to what we have at the moment, including maybe membership of the customs union or a customs policy equivalent to it, is that it offers the best possible prospects to the continued maintenance of trade on our island," he continued.

The customs union, a cornerstone of the EU, exempts all EU member states and select outside territories from paying customs duties on all goods traveling within the union. This has saved huge costs for businesses over time and enabled quicker movement of goods.

Finance Minister Paschal Donohoe during a press conference at the Department of Finance in Dublin where he made a statement on how the long-running affair into the tracker mortgage overcharging scandal will be handled in the coming months.
Niall Carson | PA Images | Getty Images
Finance Minister Paschal Donohoe during a press conference at the Department of Finance in Dublin where he made a statement on how the long-running affair into the tracker mortgage overcharging scandal will be handled in the coming months.

Ireland now fears that the U.K.'s likely departure from the customs union will both damage the two countries' 65 billion euro ($77.5 billion) annual trade market, but also reimpose a hard border between itself and the U.K. province of Northern Ireland after two decades of open borders and a delicate peace.

Uncertainty ahead 

The 500 kilometer (310 mile) border between Ireland and its northern neighbor remains a highly sensitive issue, having been the site of more than 30 years of violent conflict until a fragile peace treaty — the Good Friday Agreement — was achieved in 1998, detailing how the region should be governed.

"This is why we've been very clear from the start of the post-Brexit environment — that the longest possible transitioning period would be really important for managing this in the safest way possible, and that customs policy is at the heart of how many of these issues will be dealt with," he said.

The comments come just weeks before a December 14-15 Brexit summit, which is expected to see further plans for the U.K.'s divorce procedure outlined. The Irish government has insisted that it will not approach trade talks with the U.K. until the issue of the border is resolved, while U.K. Trade Minister Liam Fox has said that there would be no border talks until issues of trade are dealt with. "We don't want there to be a hard border, but the U.K. is going to be leaving the customs union and the single market," Fox told Sky News on Sunday.

It has been a tense week for the Irish Republic, with main opposition party Fianna Fail on Friday submitting a motion of no-confidence in Deputy Prime Minister Frances Fitzgerald of leading party Finn Gail, whose minority government relies on Fianna Fail for support.

Prime Minister Leo Vadrakar has been in talks with the opposition party all weekend to avoid a potential snap election, which could collapse the current government and throw the country into further uncertainty.

On this topic, Donohoe told CNBC: "All has been done that can be done to avoid an election taking place here in Ireland."