Irish officials wait anxiously for shifts of key policies in both Britain and Brussels after Brexit

It has been quite a week. Students of the dark arts of politics have been left with plenty to savour.

The business world has been drawing its breath and getting on with life.

In both London and Brussels, attitudes appeared to harden — though remember, appearances can deceive.

The UK’s financial establishment moved quickly to try and staunch the wounds in the wake of the referendum result.

As expected, the Bank of England governor Mark Carney moved quickly to commit to an easing in monetary policy while warning that moves to implement further quantitative easing might not by themselves prevent the British economy from falling into recession.

Indeed, some experts have warned that a shift towards zero, or even negative interest rates, could rebound on policymakers as older householders stepped up their savings to compensate for lost interest income.

In times of deep political uncertainty, investment activity will be depressed, regardless of how accommodating the monetary regime.

The big economic event in Britain was the return from the shadows of the chancellor George Osborne.

In what is likely to be his last major initiative as British finance minister, Mr Osborne delivered a speech to the Manchester Chamber of Commerce in which he abandoned his long-held and controversial commitment to a balanced budget by 2020.

He warned of how the vote would result in a shock to the economy.

This meant that flexibility in fiscal policy would be required. Some economists are calling for spending on infrastructure to be stepped up, but in recent days, there has been much speculation over the future of the outgoing chancellor’s pet project — the HS2 London to Manchester rail plan.

Some wonder whether the huge protest vote in less prosperous parts of England could impact on policy making.

The Tory leadership contender Michael Gove, at his campaign launch, lambasted City financiers and stressed the damage to many communities wrought by globalisation to large parts of the population.

It was a big shift of emphasis for a politician whose leadership ambitions now appear dead in the water, following his defenestration of his former friend and ally Boris Johnson, but whose intellectual qualities remain well recognised.

Reaching out to the less well-off has become something of a guiding theme among candidates as the Tory leadership election got underway. Time will tell whether this is more than mere rhetoric.

Particularly close attention will be paid to the utterances on the economy of the strong front-runner Theresa May and her likely closest rival Andrea Leadsom, a former financier and longtime backer of deregulation.

Ms Leadsom has boosted her reputation as one of the calmest supporters of a British exit from the EU during the referendum campaign.

Irish observers will watch closely to detect signs of a shift in UK tax policy away from the pro-City approach of Mr Osborne, who has reduced corporation tax rates in an effort to boost foreign direct investment.

Many in the Tory party favour stepping up such pro-enterprise policies as part of an effort to establish Britain as a North Atlantic version of Singapore. Events in the Labour party also appear to be working in favour of the cause of the neo-Thatcherites.

A deeply split opposition has left the Tories facing an open goal. Should an electable centre-left leader eventually emerge in Labour, it could, however, have transformative effects in pushing the ruling party back towards the centre ground.

The early indications that Britain’s attractiveness as a market for skilled labour has been dented both on the supply and the demand side.

For instance, airline EasyJet has said it will not make a decision to relocate its legal headquarters until Britain’s new relationship with the EU becomes clear.

Both JP Morgan and Goldman Sachs have in recent days hinted at likely UK job losses, while German engineering giant, Siemens has put on hold some plans for an investment in wind energy in the UK.

Plans for a merger between the London Stock Exchange and the Deutsche Borse may hit the rocks. LSE shareholders vote today on the €24bn transaction.

Businessman Richard Branson, a strong supporter of the pro-EU Remain campaign, said his group had cancelled a deal involving the creation of around 3,000 jobs. He also claimed that Chinese investors were getting ready to pull out of the UK.

At the same time, the FTSE 100, made up largely of stocks exposed to global earnings, enjoyed its strongest week in many years on the back of a weakening currency, with all the ground lost since the result made up — counted in terms of sterling.

A Singapore bank pulled out of plans to invest in the London property market, though its rivals reiterated their commitment to Europe’s leading business city.

Lawrence Yun, chief economist at the National Association of Realtors, even suggested a weaker sterling could boost investment, at least in the short term.

Many believe it would be no bad thing if the air was let out of the tyres of a frothy London property market where affordability is now a huge issue.

But then the question is: How fast and how far the fall and what it means for the UK banking sector? For Irish firms, business prospects are caught up in the political merry-go-round as old friendships and connections disappear, or go underground.

The Irish Stock Exchange could be an early beneficiary as companies apply to relist.

Employers too could benefit as people with skills seek to relocate to Ireland.

To date, none of the candidates for the Tory leadership have bothered to mention the relationship with Ireland.

Our diplomats face a battle to establish relationships with the key players in the new order when it emerges by September, if not sooner.

It will be even more important to pay attention to relationships in Brussels, in particular with like-minded countries whether in the Netherlands, Scandinavia, eastern Europe or the Baltics, not to mention Germany.

Very bright people will have to dine out for Ireland in the coming months. In these times, hearts can rule over heads.

Emotions are running deep among normally phlegmatic EU officials. Nigel Farage’s crowing in the European Parliament will not have helped matters. The concern is people could end up boxing themselves into corners.

It all boils down to whether a compromise over immigration can be reached with Britain so that a ‘hard” Brexit outcome can be avoided.

Former prime minister Tony Blair (facing his own moment of truth as Chilcott prepares to issue his report on the Iraq war) had some words of wisdom: “There is going to be a negotiation of extraordinary complexity with a thousand devils in the detail.”

There was much talk, last week, of how Britain lacks sufficient skilled negotiators. The New Zealand government has offered its former master the services of some of its trade negotiators. A case of the Anzacs again to the rescue.

There will certainly be tough talking, with the French, Belgians and the European Commission president Jean-Claude Juncker, all pressing for a swift triggering of Article 50 of the European Treaty so an early British exit can be achieved.

Ironically, such a move is being resisted by the Brexiteers who know that once this happens, the other side has the best cards to play.

The French, in particular, have reverted to type with the Parisian authorities out of the stalls like greyhounds in search of mobile investment.

It was reported that already more than 4,000 letters have been sent to investors while new bilingual schools are being readied. Another important straw in the wind came with tough comments from Swedish EU Commissioner for Trade Cecilia Malmstrom.

She warned that business between Britain and the EU would be conducted under less advantageous World Trade Organisation rules until a trade deal was eventually signed and no talks would take place until all aspects of the British exit were settled.

It “might take 10 years for the UK to negotiate a new specific trade deal,” she said.

Those are tough words from a citizen of a country seen as close to the UK. Many argue the EU, in trade, needs Britain as much as the UK needs them, but the EU establishment also knows that its very survival may be on the line.

It is not going to be seen rewarding those who have started to unpick the great EU tapestry.

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