Officials in Brussels increasingly believe that the UK will crash out of the European Union without a deal next year – a worst-case scenario for many Irish businesses – according to former European affairs minister Lucinda Creighton.

Speaking at a discussion about the challenges that Brexit poses to the Irish sport horse industry at the Royal Dublin Society on Tuesday, Ms Creighton said the EU council and commission were increasingly pessimistic about the UK striking a deal before its exit next March.

“The message that they are feeding to Irish business and Irish industry is that it’s all good to be lobbying us, but it’s not our fault that the UK is leaving,” she said.

Ms Creighton added that unless there was a “pretty dramatic change” to UK prime minister Theresa May’s attitude to talks with the EU in September and October, there was unlikely to be a deal.

A “hard Brexit” is seen as the worst outcome for Irish businesses, particularly those exporting goods to Britain, as it could result in customs controls, tariffs and a loss of competitiveness if sterling weakens further against the euro.

Ms Creighton, a consultant who previously served as a minister of state with responsibility for European affairs, said EU institutions were very sympathetic to the Republic on the question of the Border with Northern Ireland, but less so when it came to broader economic issues.

Vested interest

She pointed out that many EU industries, such as German and French car manufacturers, were raising concerns with Brussels about the likely impact of a no-deal Brexit. “Economically everybody has a vested interest in seeing some sort of a deal being hammered out.”

While she conceded that EU chief negotiator Michel Barnier could stretch talks with the UK into November, she warned that it would be hard to see any deal emerge if the process dragged into the new year.

As pressure on time for a Brexit deal grows, Ms Creighton suggested the UK parliament, which must approve any agreement, could vote against any resolution. This could in turn lead to an election, which would create even more uncertainty.

She doubted if there was time for a second referendum, and pointed out that even many members of Britain’s governing Conservative Party who favoured staying in the EU opposed this option. “Even Remainers say that this is the democratic will of the people and it has to be implemented.”

‘Dysfunctional’

Economist Jim Power, who recently published a report for Sport Horse Ireland, the body hosting the debate, argued that the British government was “dysfunctional” and that made a hard Brexit all the more likely.

“Every business in this country should be operating on the basis that there will be a hard Brexit, that there will be no deal,” said Mr Power. “Dublin will not be affected, but the further you go from Dublin the worse it will be.”

He added that industries such as food, agriculture and the breeding and sale of horses would suffer in the event of a hard Brexit.

Sport Horse Ireland hosted the debate to mark the eve of the Dublin Horse Show.