Vasileios Madouros: Navigating the risks of geo-economic fragmentation
Remarks by Mr Vasileios Madouros, Deputy Governor of the Central Bank of Ireland, at the Kennedy Summer School, New Ross, 1 September 2023.
The views expressed in this speech are those of the speaker and not the view of the BIS.
Thank you very much for inviting me to take part in this year's Kennedy Summer School. It is a real pleasure to join you here today.
I spent the day in the South East yesterday and – as part of meeting local businesses – I had the opportunity to visit Rosslare port.
The port has been central to a key transition in recent years: the re-adjustment in the trading relationship between the EU and the UK as a result of Brexit.
Among others, this has upended trade routes to and from Ireland. As companies have sought to reduce reliance on the UK landbridge, the port has been almost a five-fold increase in direct trade of goods with the rest of the EU.
The changing trading relationship between the UK and the EU has been particularly relevant for Ireland, given the historical linkages between our economy and the UK.
But Brexit is one manifestation of a broader structural risk facing the global economy. The IMF has called this geo-economic fragmentation.
Put simply, this refers to the risk of a reversal of the greater integration we've seen globally over decades: in terms of the flow of goods, services, capital, talent or ideas.
Ireland's economic model has embraced – and is dependent on – globalisation.
So, today, I'd like to focus on the potential implications of these developments for Ireland and for domestic economic policy.