Rarely has a UK election been of greater interest to Ireland: a Tory win could be catastrophic for the Irish economy if it triggered Britain’s exit from the EU

A general election in Britain is always watched closely on the other side of the Irish Sea, not least because of the tumultuous political history linking the two islands. But never has an UK election been of greater interest to Ireland’s business community, amid fears that if the Conservatives win, it could spell catastrophe for the country’s economy.

A win for David Cameron would trigger a referendum on membership of the European Union, which if it results in a British exit would send shockwaves through Ireland’s economy. Each week there is €1bn (£730m) in trade between the two countries, supporting about 400,000 jobs.

Cost-benefit analysis of free movement in the European Union | Letters Read more

It may be no surprise that Britain is the biggest market for Ireland’s huge agricultural sector; what’s more surprising is that Ireland is the biggest single market for Britain’s food exports. London-Dublin has become the busiest international air route in the world, largely thanks to Ryanair. Almost alarmingly, Ireland is a bigger destination for British exports than China, India, Brazil and Russia combined.

The giant US multinationals with European headquarters in Ireland – an astonishing list headed by Apple, Intel, Google and Facebook – would probably sneeze rather than catch a cold if Britain quit the EU. Only 12% of their exports head to Britain. But in the Irish small and medium-sized enterprise sector, more vital for job creation than the tax-avoiding corporations, Britain is crucial, taking 43% of their exports.

During the debate over Scottish independence, Irish officials maintained a studied impartiality. But a Brexit is another matter. Just a few weeks ago, Enda Kenny, the taoiseach, established a unit in Ireland’s equivalent of the Cabinet Office to prepare for a possible exit of Britain from the EU. John McGrane, a director of the British Irish Chamber of Commerce and a contributor to the new book Britain and Europe: The Endgame – An Irish Perspective, warns that free movement of labour and capital between Britain and Ireland has become so embedded that “any notion of change – such as the reimposition of border controls – is an appalling vista.”

Ireland’s political and business communities have accepted that Britain wants to renegotiate its relationship with the EU and now wants to take on the role of broker in Brussels (so long as the outcome is that Britain remains inside). Last weekend, parts of Dublin were locked in a dress-rehearsal for the celebrations next year to mark a century since the 1916 Easter Rising that presaged the country’s independence from Westminster. A century on, the political and economic imperative is now to keep Britain in, not out.