Ireland’s taoiseach has stepped up his warnings about the consequences of a British exit from the European Union, saying it might spark a return to violence in Northern Ireland and trigger an economic slowdown in the Republic. Enda Kenny said he and his ministers would be campaigning in the UK to try to persuade Irish-born residents to vote to remain.

It is understood that there is concern in Ireland that some younger Irish people in the UK are less inclined to vote to remain than more established Irish settlers.

In a speech in Dublin, Kenny – freshly installed as leader of a new coalition government – said no future arrangement between Ireland and a UK outside the EU could possibly work as effectively as the current one. His remarks will be seen as a direct rebuff to the UK’s Northern Ireland secretary, Theresa Villiers, who has claimed that trade relations with Ireland would be unaffected.

Without specifically warning of a return to violence, Kenny said he was concerned that a British departure from the EU would undermine some of the institutions that have acted to support the Northern Ireland peace process. Citing €3bn of EU funding for north-south economic cooperation, he said: “In a jurisdiction that still has ‘peace walls’ physically dividing communities, the importance of the EU’s support for these small building blocks of economic and social infrastructure should not be taken for granted.

“The trust that enables that kind of close cooperation was forged at least in part through years of working side by side in Brussels since 1973. North-south cooperation – a keystone of the Good Friday agreement – is so much easier when both jurisdictions are members of the same union.”

A similar warning of a return to conflict in Northern Ireland in the event of Brexit was made on Thursday by Germany’s foreign minister, Frank-Walter Steinmeier. He said: “If the United Kingdom were to quit the EU, there will be a border again between Ireland and Northern Ireland. And that could at least have the potential of rekindling a conflict that has seemingly calmed down.”

Kenny also used his speech to make an economic case for a remain vote. “We can argue all day about what new arrangements could be put in place after a Brexit and how long that would take,” he said. However, no alternative arrangement will be better than the one we have: a single market and seamless flows of goods, services, capital and people.

“There are a myriad of different trading models that could be put in place. Each of the alternatives would impede, not improve, trade flows. They would build in extra bureaucracy, not reduce red tape.” He said as many as 400,000 jobs in Ireland and the UK were at stake.

There has been speculation that Ireland might benefit from Brexit, as some of the UK’s financial services industry might transfer to Dublin, but Ireland says that has not been a factor in its decision to campaign for remain.