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DBRS: No-deal Brexit poses risk to Irish peace pact

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DBRS: No-deal Brexit poses risk to Irish peace pact

A no-deal Brexit scenario represents significant security and political risks to Ireland, DBRS said Sept. 5, noting that the Irish government's actions after the U.K.'s departure from the European Union could have credit implications for the sovereign.

"A return of border checks and constraints on the free flow of people and goods between the two parts of Ireland, likely necessary in a no-deal Brexit, could undermine the security gains made in Northern Ireland since the signing of the Belfast Agreement," said DBRS Vice President Jason Graffam.

The 1998 Belfast Agreement, also known as the Good Friday Agreement, ended decades of conflict in Northern Ireland and established a devolved government for the British territory.

The U.K. parliament voted 298 to 56 against Prime Minister Boris Johnson's motion for early general elections, after having approved a bill seeking to require government to ask the EU to delay Brexit until Jan. 31, 2020.

DBRS in August maintained Ireland's long- and short-term foreign- and local currency-issuer ratings at A (high)/R-1 (middle), with a stable trend on all ratings. It said Brexit-related uncertainty continue to pose downside risks that will weigh on the ratings, despite the Irish economy's strong performance and improved debt-to-GDP ratio.

Meanwhile, officials in Dublin have begun a new phase of no-deal Brexit preparations this week, calling on businesses to increase their level of readiness ahead of Britain's impending exit from the EU on Oct. 31, Reuters reported, citing an official statement.