03 Oct 2022

Brexit could spell disaster for local firms says Longford financial guru

Brexit could spell disaster for local firms says Longford financial guru

Local companies who depend heavily on UK exports couk see their profits wiped out overnight if Britain decided to pull out of the EU.

That's the view of treasury and financial management guru John Finn.

 The Lanesboro native, and managing director of Cork based firm Treasury Solutions  Ltd, believes   the risks to Ireland and in particular British orientated exporters are huge.

And at the top of that list, Mr Finn conceded, remain the likely aftereffects a Brexit would have on foreign exchange markets.

“The biggest issue facing companies is currency,” he said. 

“Based on current markets if a company is exporting to the UK they would be down 10 per cent already.

“If a company  was making  making €90,000 profit on sales last year it would be wiped out this year because of the (change in) currency.

 “When you consider the average industrial wage is €30,000 or so that's the cost of employing three people a year which to an SME is an awful lot.”

Huge consequences 

Mr Finn, who grew up in the south Longford town and attended St Mel's College, said the consequences of an exit vote next Thursday (June 23) is huge “on so many fronts”.

It's an analysis which leading and international global ratings agency S&P validated last week.

According to a Brexit sensitivity index it carried out in recent days, the economies of Ireland, along with Luxembourg, Malta and Cyprus, remained most at risk by a Brexit vote.  

Mr Finn said companies, big and small, were bracing themselves ahead of the June 23 vote.

“ If they decide to stay in it(currency markets) will probably strengthen, meaning companies will get more euros for their sterling, but if they leave it will have big risks and you could even see it go as high as 0.85 which is a huge move.”

He said a Brexit made no economic sense and was an outcome that would have far reaching consequences for locally based tourism and hospitality firms.

“ Last year you could have got around €1.40 for £1 but if that (exchange rate) goes to 0.85p (for €1) you are then talking about a €1.16-€1.17 return. 

“That could then mean that people will stop travelling or you are going to have to look at cutting prices,” he warned.

To continue reading this article,
please subscribe and support local journalism!

Subscribing will allow you access to all of our premium content and archived articles.


To continue reading this article for FREE,
please kindly register and/or log in.

Registration is absolutely 100% FREE and will help us personalise your experience on our sites. You can also sign up to our carefully curated newsletter(s) to keep up to date with your latest local news!

Register / Login

Buy the e-paper of the Donegal Democrat, Donegal People's Press, Donegal Post and Inish Times here for instant access to Donegal's premier news titles.

Keep up with the latest news from Donegal with our daily newsletter featuring the most important stories of the day delivered to your inbox every evening at 5pm.