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This file photo taken on August 17, 2016 shows an arrangement of British 20 pound bank notes. Ireland is suffering because of Brexit. The pound has lost almost 20 per cent against the euro since the June referendum, squeezing the profit margins of Irish exporters. Irish mushroom farmers, who ship 80 per cent of their production to Britain, are going out of business.PAUL ELLIS/AFP / Getty Images

Who will be next to follow Britain out of the European Union? With 28 member countries in various degrees of irritation with the EU , surely Britain's exodus cannot be a one-off event.

The punters are already sizing up Italy, Greece, France, the Netherlands, Austria, Hungary and Finland as potential truants. Of the lot, Italy seems closest to the edge. Its December referendum on constitutional reform, if lost, could trigger a snap election whose potential victor is the anti-euro Five Star Movement.

One country the punters are overlooking is Ireland. There is no country in the EU that stands to suffer more from Brexit than Ireland. At some point, it may decide that joining Britain would cause less economic damage than staying put. Any decision will depend on what sort of post-Brexit trade access deal, if any, that Britain negotiates with the EU.

Poor, hapless and – yes – too-often boneheaded Ireland. In the 1990s, it used the lure of low taxes to turn farmland into tech and financial services land. In 2010, after allowing its banks and house construction companies to adopt casino business strategies, it sued for a bailout from the EU and the International Monetary Fund.

But unlike Greece and Portugal, Ireland rehabilitated its economy fairly quickly. Its growth rate, at about 4 per cent this year, is well above EU and euro zone averages.

The sweet little turnaround story came to an abrupt end in June when Britain, Ireland's main trading and investment partner, voted to hit the road. In August, the European Commission ruled that Ireland had used obscenely low tax rates to subsidize Apple illegally and ordered Apple to pay €13-billion ($18.8-billion) in taxes, plus interest, to the Irish government. The ruling may doom Ireland's business model, which appears to be based on offering free rides to foreign companies in exchange for jobs. The EC is pushing for common tax rates across the EU, though years, maybe decades, might pass before that central-planning dream comes true.

In the meantime, Brexit looms as Ireland's potential wrecking machine. Ireland's fears no doubt intensified on Friday, when an unpublished document obtained by Bloomberg showed that British Prime Minister Theresa May had appointed a highly euroskeptic team to negotiate Britan's exodus. The move implied that Ms. May was always a closet Brexiteer who favoured a "hard" Brexit; that is, full withdrawal from the EU and its customs union.

If so, Ireland is in trouble. Ireland and Britain are economic Siamese twins. Writing on Voxeu.org , economists Patrick Honohan and John FitzGerald said more than 15 per cent of Ireland's exports go to Britain, but the true figure is much higher – perhaps 25 per cent – when it is adjusted to include Irish employment content in those exports. Half of Ireland's agricultural exports go to Britain. Britain is the dominant investment destination for Irish companies, which employ about 200,000 workers in Britain. British companies, in turn, employ a roughly equal number in Ireland. By almost every measure, Britain is Ireland's top economic partner.

Already, Ireland is suffering because of Brexit. The pound has lost almost 20 per cent against the euro since the June referendum, squeezing the profit margins of Irish exporters. Irish mushroom farmers, who ship 80 per cent of their production to Britain, are going out of business.

Under the "hard" Brexit scenario, Britain might erect all sorts of trade barriers (as would the EU against Britain), damaging Ireland's exports to, and investments in, Britain. Of course, Ireland, as an EU member, could direct some exports, such as agricultural products, to the continental EU countries, but it would have to cut prices to buy market share. If that scenario were not bad enough, a real border probably would go up between Ireland and Northern Ireland, hurting both economies. Businesses now trade back and forth across the border as if it did not exist.

There's more. If tariffs, post-Brexit, are placed on Britain's energy exports, Ireland's energy costs will rise. Britain and Ireland could also find themselves squabbling over offshore fishing areas.

A hard Brexit will see Ireland weighing the pros and cons of continued EU membership, and imitating Britain might be the best choice, all the more so if the countries could form a trade pact of their own. The scenario would make more sense for Ireland if its exit would allow it to keep its low corporate tax rates intact. Britain might drop its tax rates too, to dissuade employers from fleeing after Brexit. Britain and Ireland could emerge as cold-water tax havens – no need to go to Panama or the British Virgin Islands.

No one in Ireland is talking about bolting – yet. If Britain gets a sweetheart access deal with the EU, the whole idea of Ireland following Britain out the door would be silly. But Ms. May is giving no indication a soft Brexit is on the agenda, nor are the gnomes in Brussels – they want hard Brexit or no Brexit. If both Britain and Ireland go, the EU would suffer a double blow and the domino effect could well become reality.

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