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Photographer: Chris Ratcliffe/Bloomberg Photographer: Chris Ratcliffe/Bloomberg

Ireland’s biggest companies are getting a taste of the pain that could come from the U.K. crashing out of the European Union without a deal.

Amid the deepening impasse over how to deal with the Irish border, the country’s ISEQ All-Share Index has been the worst performing benchmark in Europe, the Middle East and Africa since Boris Johnson became U.K. prime minister, according to data compiled by Bloomberg.

Johnson has declared the so-called backstop for the Irish border “undemocratic” and vowed to leave the EU with or without an agreement. The hard-line stance causes uncertainty over how commerce between Britain and the bloc will continue after the Oct. 31 deadline and raises the specter of checkpoints returning to the island.

What a No-Deal Brexit Would Mean for the Irish Border: QuickTake

A hard Brexit would see the creation of a border between Ireland and the U.K.’s Northern Ireland “overnight,” said Fiona Muldoon, chief executive of insurer FBD Holdings Plc, joining a growing chorus of companies from Ryanair Holdings Plc to Bank of Ireland Group Plc saying the uncertainty around Brexit is biting.

Smurfit Kappa Group Plc said British demand is among the weakest in the packaging company’s 35 markets and its U.K. spending is about 20% to 25% lower than it would otherwise have been because of the political uncertainty, suggesting no deal would be “disastrous” for the country and hit Ireland’s trade with its neighbor.

Tony Smurfit Photographer: Simon Dawson/Bloomberg

“It’s a really important issue for us that there is a deal,” CEO Tony Smurfit said. “We hope that in the end the adults will take over and make sure a deal happens.”

Less Lending

Ryanair, Europe’s biggest budget airline, recently revealed plans for one of the deepest rounds of job cuts in years, as Brexit amplifies concerns around low fares and the grounding of Boeing Co.’s 737 Max jetliner.

Michael O’Leary Photographer: Chris Ratcliffe/Bloomberg

A no-deal Brexit “could have a very damaging effect, particularly on our U.K. bases and on some of our Irish bases, which are heavily dependent on people traveling between Ireland and the U.K.,” CEO Michael O’Leary told staff.

The concerns over the fallout from a crash Brexit is prompting Irish businesses, especially smaller firms, to refrain from borrowing, according to Bank of Ireland CEO Francesca McDonagh.

“Brexit uncertainty is creating some reticence,” McDonagh told analysts. “A year ago we would have assumed that Brexit would have been resolved.”

Pound Fallout

Johnson’s pledge that the U.K. will leave the EU on Oct. 31 “do or die” has prompted the pound to tumble to the lowest level since early 2017. The currency’s slump is “a serious threat to many Irish exporters if not sufficiently recognized, managed and mitigated,” said Simon McKeever, chief executive of the Irish Exporters Association.

Amid all the gloom, some executives do see a potential silver lining. A no-deal Brexit could bolster demand for office space in Dublin “because I think you’ll see financial companies, legal companies relocate,” said Kevin Nowlan, chief executive of Hibernia REIT, one of the biggest landlords in Irish capital.

“The longer there is indecision from the U.K., the better for us,” Nowlan said after the company’s annual investor meeting. Still, he conceded downsides remain, with local companies holding off on taking space as the uncertainty lingers.

‘No Lifeboats’

While the catalog of concerns hasn’t yet translated into pressure on Irish Prime Minister Leo Varadkar to back down, there’s an emerging acknowledgment of the risks, and business leaders are looking for more clarity on how the government plans to protect the economy.

“It’s akin to the captain of a ship going to sea without any lifeboats for the passengers,” said Joe Healy, president of the Irish Farmers Association. Varadkar’s administration is “saying nothing about plans to protect Irish farmers, who are in the front line and the most exposed in Europe.”

— With assistance by Richard Weiss