On the surface, Ireland stands poised to emerge as a major beneficiary of the U.K.'s vote to leave the EU. But the downside of the Brexit vote is already rippling through this tiny island of 5 million people.
More than 100,000 jobs, many of them in the lucrative financial sector, are expected to leave England. Frankfurt, Paris and Dublin are the most obvious places for financial services concerns to move them and Dublin is the only English-speaking city in the same time zone as London. In recent days, Ireland's passport office has been flooded with so many requests from the U.K. it has asked for a temporary moratorium.
Both Germany, for which the U.K. is a huge buyer of its exports, and Ireland have many incentives to go to "bat for Britain," as the Irish Independent outlined yesterday. Both nations' economies are closely inter-linked, share a common border, one that both countries hope can remain peaceful. That hasn't always been the case.
Already, Irish farmers are getting whacked by the plunging British pound, which has fallen 20 percent since last November and 10 percent in the last week. The collapse of sterling may ultimately help England but it hurts Ireland.
That is about all going well for England this week. Since the vote, Visa said it probably would move several hundred jobs to the continent and WPP, the world's largest ad agency based in London, has indicated that it will now shift more new hires there and add fewer in London. HSBC and JP Morgan have already said as much.
Worse yet is the state of the London property market. Once the world's hottest, it was already showing signs of a slowdown and, since the vote, it has come to a standstill. Shares of Persimmon, the nation's largest homebuilder, have fallen 36 percent.
For now, EU officials are arguing that pro-EU nations like Ireland and Scotland have little right to expect special side deals for several reasons. In Scotland's case it might be able to gain EU membership, but only if it left the U.K. entirely.
Brexit leaders in England told voters they could leave the EU, stop sending 350 million pounds a week to EU headquarters in Brussels and still enjoy all its benefits, including open access to European markets, while regaining total control over their own borders.
Brexit leaders now concede it was a fantasy and 7 percent of those who voted to leave admit they made a mistake, according to several polls. That's one reason why many, from business leaders like Richard Branson to 3.5 million people who signed a petition, are asking for a second vote. While that remains to be seen, it is obvious this current EU crisis is only in its third inning.
EU leaders face little choice but to initially adopt a hard line with their friends and supporters in small nations like Ireland and Scotland looking for special deals. Both nations historically have punched way above their weight, but if a few get their own deal, every other nation will demand one. Many larger nations on the continent already are disgusted with
edicts from unelected, big-spending potentates in the stultified, socialist bureaucracy in Brussels.
Were the EU placed on a Remain or Leave ballot in the 27 other member nations, Ireland and Scotland might be among a minority to vote to remain.
Between 1987 and 2000, the Emerald Isle's economy grew by 140 percent. Americans now remember those times as the good days, but the U.S. economy only grew 40 percent while the EU as a whole grew 30 percent.
So tiny Ireland and giant Germany are two of the few nations to view the European project in a positive light. That ultimately may give Ireland more clout as things play out than many think.
Still, as I spoke with people in Dublin yesterday, many citizens think the EU should have been a free-trade zone and little more. Go to France, Spain or Italy and the Brussels bureaucrats are held in low regard. Italy's economy is the same size as it was in 2000. So the EU's problems go way beyond Brexit.
As for England, the humiliations keep piling up. On Monday, its soccer, er football team, was badly defeated by Iceland (with a population of 320,000) in a 2-1 upset in the EuroCup. That is almost as big deal to Brits as the World Cup.
Iceland's coach works full-time as a dentist. Its star striker-scorer earns his living running a gas station. For England's coach, it was a full-time job paying 3.5 million pounds a year and he immediately resigned.
According to an English football announcer who called the British players a "bunch of frauds," players with similar skills in nations like Spain, France and the Netherlands would get paid 25 percent of what the Brits make. Maybe they can fund some of what the EU won't.