Ireland’s ISEQ Overall Share index fell by more than 12% in the four days after Britain’s EU referendum. You can see why. It is the European economy most exposed to the UK, with goods and services exports to Britain accounting for 18% of GDP.
There are close financial links between the two countries. At Bank of Ireland, for instance, UK loans make up 44% of the overall portfolio. What’s more, UK firms could reduce their investments in Ireland. All told, a 1% reduction in UK GDP implies a 0.3% fall in Irish output, estimates the Economic and Social Research Institute.
Still, the slide may have been an overreaction, says Jonathan Eley in the FT. Brexit would be worst for smaller firms, and the index is dominated by large ones with global reach. The top