The Bruges Group spearheaded the intellectual battle to win a vote to leave the European Union and, above all, against the emergence of a centralised EU state.

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Bruges Group Blog

Spearheading the intellectual battle against the EU. And for new thinking in international affairs.

Brexit, Ireland, and the EU

Submission by Anthony Coughlan to the Northern Ireland Affairs Committee of the House of Commons on North-South border problems in Ireland and the Irish Government's policy response in the context of Brexit.

Executive Summary

  • -Logically, there would be no new North-South Border problems within Ireland if the Republic of Ireland should leave the EU in tandem with the UK;
  • -There are no strong positive arguments for the Republic remaining in the EU when the UK leaves and there are good arguments against. The main argument for the Republic remaining in the EU is the negative one that it has joined the Euro-currency and the possible difficulty of leaving that;
  • - Germany may be wiling to facilitate an Irexit (Ireland Exit) in tandem withBrexit in certain circumstances;
  • -Current Irish Government policy is to do everything it can to frustrate Brexit, operating as part of "Team EU". Irish policymakers and public opinion will only face up to the real adverse implications of Ireland remaining in the EU without the United Kingdom if this ambition to frustrate a meaningful Brexit fails - and is seen to fail;
  • -The interests of the peoples of both Ireland and the UK are best served by the two States leaving the EU at or around the same time, with free trade being maintained between the two of them and with the EU, or with possibly a customs union being established between Ireland and the UK in appropriate circumstances, with special arrangements for agricultural products;
  • -The Republic of Ireland does not need a constitutional referendum to leave the EU.

1. NO NORTH-SOUTH BORDER PROBLEMS IF IRELAND LEAVES THE EU TOO: The only way of avoiding the establishment of an EU federal-state-style external frontier post-Brexit, with all its associated problems, either between the North and South of Ireland or between the two islands of Britain and Ireland is for the Republic to leave the EU at or around the same time as the UK. This seems logically and politically an irrefutable proposition, however unpalatable the prospect of leaving the EU may be currently for many in the Republic. This is for three principal reasons:-

2. NEW BORDER DIMENSIONSIF THE REPUBLIC STAYS IN THE EU: Firstly, for the Republic to seek to remain in the EU while Northern Ireland leaves it as part of the UK would add several new dimensions to the existing North-South Border within Ireland and make eventual Irish reunification more difficult.Such reunification is an aspiration of all political parties in Ireland, North and South, apart from Northern Ireland Unionists.The most obvious such dimensions would be customs posts or other customs controls as the UK leaves the EU customs union; food and EU veterinary checks on animals, milk and other items moving across the Border; possible passport controls to prevent EU citizens using the Republic for backdoor entry into a post-Brexit UK; and growing divergence between EU-harmonised law and justice provisions in the South and Anglo-Saxon-based ones in the North.

3. SECURITY IMPLICATIONS OF THE UK LEAVING THE EU AND THE REPUBLIC STAYING IN IT: Secondly, the statement by Northern Secretary Peter Brooke in 1990 that Britain had "no strategic or economic interest" in staying in Northern Ireland if the majority of the people there should wish to leave the UK at some time in the future underpinned the 1993 Downing Street Declaration and the 1998 Good Friday Agreement. Brussels has signalled recently that security and military union is the preferred next stage of EU integration.If the Republic remains in the EU when the UK leaves, it means that it will in time become part of an EU military bloc under German hegemony.That can hardly be in the security interest of the UK.If Ireland were ever to be reunited on the basis of the Good Friday Agreement, however distant that prospect may seem at present, it would mean that the whole island and not just the Republic would become part of such an EU military bloc under German hegemony also.This would give future British Governments good reason from their point of view for remaining in Northern Ireland and discouraging any future moves towards a united Ireland.What the Good Friday Agreement implicitly envisaged as a possibility was a genuinely neutral united Ireland having a friendly and cooperative relation with Britain at some time, however distant, in the future. But if the South stays in the EU while the North leaves the EU along with the rest of the UK, this security calculus significantly changes.

4. NEW OBSTACLES TO POSSIBLE FUTURE IRISH REUNIFICATION: Thirdly, The Republic of Ireland staying in the EU when the UK leaves would give Northern Ireland Unionists a whole set of new and objectively valid reasons for opposing Irish unity. From their point of view Irish re-unification at some future date, however distant, would mean that the people of Northern Ireland would have to rejoin the EU, with its 123,000 or so supranational rules, legal acts and international agreements - which is hardly real freedom.They would have to adopt the dysfunctional euro-currency. They would have to take on the burden of helping to pay for the private bank debt that the ECB and the EU Troika imposed on the Republic when it decided in 2010 that no Irish bank should be let go bust following the 2008 financial crisis.And they would have to agree to be bound by all the new EU laws and regulations that will be passed between now and whenever Irish reunification might be brought about.It is hard to see Unionist consent to reunification occurring in those circumstances. Yet as the Good Friday Agreement recognizes, Partition can never be ended without the agreement of at least a significant section of the present Unionist population.One thing is certain. Ulster Unionists will never be attracted to the idea of running what would effectively be an EU province instead of an independent State. For that is what the South remaining in the EU/Eurozone realistically entails.

5. IREXIT WOULD SAVE THE REPUBLIC MONEY: Apart from the need to avoid adding new dimensions to the North-South Border if the Republic should seek to remain in the EU when the UK leaves, the balance of economic and political argument is heavily in favour of Ireland leaving the EU in tandem with Britain and Northern Ireland. For one thing, leavingthe EU would save the Republic money.The Republic became a net contributor to the EU Budget in 2014.This is a big change from the previous forty years when it was a major net recipient of EU funds, mainly through the EU's Common Agricultural Policy. From now on money from Brussels will be Irish taxpayers' money recycled, as is already the case with the UK, employing some people in Brussels on the way.Farm payments under the CAP will come from Dublin not the EU. This removes what hitherto has been the principal basis of Irish europhilia, official and unofficial - namely cash. That has always been more important for the population of the Republic than ideological enthusiasm for Eurofederalism or "the EU project". There has never been any popular support for that, although elementsin the Republic's "EU industry" of policy think-tanks, politicians, senior civil servants and editorial offices do support it and are in continual consternation over Brexit.

6.TAKING BACK CONTROL OF THE REPUBLIC'S FISHING WATERS,AS WELL AS OF MUCH ELSE:If the Republic remains in the EU post-Brexit it will have to pay more to the EU Budget as its proportionate contribution to help compensate for the loss of Britain's annual net payment.A bonus of leaving along with the UK on the other hand is that it would get back control of its sea-fisheries and other underwater resources.The value of annual fish-catches by foreign boats in Irish waters is a several-times multiple of whatever money the Republic has got from the EU over the years.Byleaving the EU Ireland would also be taking back the right to make its own laws and decide its own external policies - re-establishing its national democracy and nationalindependence in other words. It would be resuming control of its currency, its budget and taxation policy, its borders, its trade policy and its foreign and security policy and it would be able to maintain a meaningful neutrality policy if it wished to do that.

7. THE REPUBLIC'S FOREIGN TRADE WITH THE ENGLISH-SPEAKING WORLD IS MORE IMPORTANT THAN ITS TRADE WITH THE EU:As regards trade and investment, the Republic sends 61% by value of its goods exports and 66% of its services exports tocountries that are outside the continental EU26, mostly English-speaking.It gets two-thirds of its imports from outside the EU26.The USA is the most important single-country market for the Republic's foreign-owned firms and the UK for its Irish-owned ones - the latter being especially important for employment. The UK and US markets together are comparable in importance to that of the EU26 post-Brexit.Taking other English-speaking markets into account, such as Canada, Australia etc., makes trade with the English-speaking world more important for the Republic than the EU26.In 2015, the most recent year for which Central Statistics Office figures are available, the Republic exported €112 billion worth of goods and imported €70 billion. It exported €122 billion worth of services and imported €151 billion. The table shows the distribution of this trade by area – trade in services being broadly similar.

Distribution of Irish foreign trade in goods,2015

ExportsImports

EU26 without the UK39%34%

Rest of World including UK61%66%

UK 14%26%

USA and Canada25%16%

USA and Canada+the UK39%42%

Source: CSO Statbank, External Trade, Tables TSA01 and TSA05

8. CLOSER TO BRITAIN THAN GERMANY AND TO BOSTON THAN BERLIN: These trade patterns are a consideration also for foreign investors coming to Ireland.Economically and psychologically, Ireland is closer to Britain than Germany and closer to Boston than Berlin. This puts exaggerated talk of the EU's "giant market of 500 million" in perspective. That shrinks anyway to 435 million with the UK gone. Some 7000 million people live outside the EU.It is not of course a question of the Republic having to choose between one export market and another if it should decide to leave the EU along with the UK.If common sense prevails in the negotiations, there should be continuing free trade between the Republic, the EU and the UK in the context of any Brexit or Irexit.

9.THE REPUBLIC WITHOUT THE UK AS AN EU PARTNER:Without the UK beside her in the EU Council of Ministers the Republic would be in a weaker position to defend its low rate of company profits tax, important for attracting foreign investment, for which Germany and the Brussels Commission are now gunning.It would be less well able to defend its fishery interests, its trade interests, its distinctive Anglo-Saxon-based traditions in the area of law and justice, which the EU aims to harmonise, and its military neutrality.

10. IRELAND'S MEMBERSHIP OF THE EUROZONE: The main argument for the Republic staying in the EU when the UK leaves is the negative one that it is a member of the Eurozone while the UK is not. When the euro was established in 1999 the Republic's politicians decided to adopt the currency of an area with which it did just one-third of its trade. They thought at the time that Britain would be bound to adopt the euro-currency too and that by going first they would show how "communautaire" they were. The Republic now desperately needs to get its own currency back so that it can devalue it along with sterling and the dollar, and not be stuck with an implicitly overvalued euro which is hitting its exports and encouraging competing imports. Failing that the Northern Ireland-bound shopping queues will grow.

11. THE VALUE OF AN INDEPENDENT IRISH CURRENCY: The Republic did very well when it had its own currency and it allowed the Irish pound to float vis-a-vis the currencies of its major trading partners between 1994 and 1999, when it adopted the euro. Those were the years of the so-called "Celtic Tiger" economy, when the Republic had an annual average economic growth rate of 8% a year.This was the only period in the ninety-year history of the Irish State in which it followed an effectively independent exchange rate policy, which made it highly competitive. This is why Dublin should aim to leave the Eurozone and re-establish an Irish currency in a planned concerted manner, negotiating its departure with Germany, Britain and the ECB in private behind the scenes as part of its move to leave the EU along with the UK, rather than be forced to abandon the euro anyhow in some future Eurozone financial crisis. The Republic's experience of the Eurozone has in any case been very painful. The Republic already had a boom on when it joined the Eurozone in 1999.It needed higher interest rates at the time to cap this boom, not lower. The unsuitable low interest rates of the Eurozone encouraged the Republic's property boom for years in the early 2000s.When that boom turned to bust in 2008 the European Central Bank insisted on imposing€64 billion of the bad debts of the Irish private banks on to the Irish State's taxpayers – to prevent the "contagion" of banks having to bear their own losses spreading to the Mediterranean Eurozone countries .

12.POSSIBLE GERMAN ATTITUDES TO BREXIT AND IREXIT:It is probable that Ireland is the only country that could leave the euro and go back to its national currency without causing a general crisis for the euro area as a whole. But it would desirably need the support of the UK and Germany to take such a step with minimum disruption. Presumably if Brexit is ultimately to be achieved it will boil down to a deal between Britain and Germany, mainly over money. The UK has some good cards it can play in this. For example it might back Germany obtaining a permanent seat on the UN Security Council.Germany might indeed be willing to facilitate Ireland leaving the Eurozone, recognizing that it is within Britain's historic sphere of influence. Germany might also see that the aspirations of sections of its policy elite to hegemony over the continental EU would be advanced if the two English-speaking island countries, not just one, should leave the EU together.

13. ANGLO-IRISH AGRICULTURAL TRADE: Britain will presumably revert to its traditional cheap food policy when it leaves the EU. Contrary to some Irish commentary, there is nothing immoral in a country importing its food from wherever in the world it can buy good quality products cheaply. At the same time the British Government will doubtless want to support UK farmers for political reasons, presumably by means of direct farm subsidies to replace the price supports they now get from the EU's CAP. Nearly half the Republic's agricultural output goes to the UK market at present, so such a development will have major implications for it. There is a danger that Irish farm products will be displaced in the UK market post-Brexit by New Zealand lamb, Brasilian beef, American chicken etc. It may well be in the interest of both States to come to a financial agreement to deal with this issue in the context of both States leaving the EU together.

14. A POSSIBLE ANGLO-IRISH CUSTOMS UNION: The above are the main reasons why the focus of intelligent Irish policy should now be on negotiating a comprehensive deal with London for the Irish State to leave the EU along with the UK, while maintaining maximum free trade with both EU and UK post-Brexit, possibly on the basis of an Anglo-Irish customs union Such a deal should guarantee continued free access for Irish food exports to the UK market on the most favourable terms.It should also cover Bank of England support for a restored Irish pound so that it did not have to devalue excessively in the initial weeks following its re-launch.

15. CURRENT IRISH POLICY IS TO DO EVERYTHING POSSIBLE TO FRUSTRATE BREXIT:The current belief in official circles in Dublin is that there is a good chance that a meaningful Brexit can be frustrated by cross-party resistance in the House of Commons and Lords, supported from outside.It is taken for granted that the German, French and other EU Governments believe the same and that for this reason the EU is likely to make things as difficult as possible for Britain in the EU/UK negotiations over the coming year.The EU is expected to test to destruction the possibility of Brexit being reversed in Parliament.It is only if the EU and its supporters fail to overturn the Brexit referendum result - and recognize that they cannot - that the serious talking will start, possibly quite late in the day.One can take it that the Irish Government, to judge by its current stance, will be cooperating in this with Brussels and with Germany and France in every way it can and will do everything possible to frustrate Brexit. UK policy-makers can take it that former Irish-EU grandees such as Peter Sutherland, Pat Cox, John Bruton and Alan Dukes will be working behind the scenes with the Irish Government to this end. They will be systematically interacting with those anti-democratic "Remainers" in British Labour and Conservative circles who refuse to accept last year's democratic referendum vote. It is this writer's view that it is only if such efforts fail - and are seen to fail -that Irish public policy-makers, and the Irish media and public generally, will face up to the real implications of their seeking to remain part of "Team EU" when the UK leaves the EU, along with 1.8 million fellow Irish nationals in Northern Ireland and some 500,000 Irish citizens living in Britain.Irish public attitudes to remaining in the EU are likely to change significantly then.

16. DUBLIN'S UNTHINKING COMMITMENT TO TEAM EU:Former Irish Taoiseach Bertie Ahern implicitly criticised Dublin's unthinking commitment to "Team EU" when he stated that Ireland had "missed the boat" by failing to engage with London directly before the UK/EU negotiations began with EU chief negotiator Michel Barnier, using Strand Three of the Good Friday Agreement for that purpose. "For the next year it is left to trying to influence him and his team. That is the challenge we face as a country," Ahern said. (Irish Times, 12 July 2017). In considering the Irish aspect of the UK/EU negotiations it is important to bear in mind that the career-federalism amongst Irish policy-makers, supported by unthinking sections of the Irish media, which is the principal influence on current Irish Government policy on Brexit, is fundamentally opposed to the interests of the Irish people themselves as well as to the interests of the UK.

17. NEW NORTH-SOUTH PROBLEMS THE RESULT OF IRELAND'S DECISION,NOT BRITAIN'S:If new dimensions are added to the North-South border within Ireland in the context ofBrexit it will be the result of the Irish Government's deciding to go with "Team EU" rather than with its 1.8 million fellow nationals inNorthern Ireland.The responsibility will be overwhelmingly Ireland's, not Britain's.There are the closest cultural, linguistic, sentimental and historical links between the two island countries.Ninety percent of the Republic's oil and gas come from the UK. Some 80% of the Republic's trade with the continent goes through Britain.There would be a popular revolt in the Republic if the policy commitment to "Team EU" by the Republic's political elite put the Anglo-Irish travel area in peril in any way. These are relevant points for UK policy-makers to bear in mind when they are interacting with Dublin's Euro-federalists in the period ahead.

18. NO REFERENDUM NEEDED IN IRELAND TO LEAVE THE EU:It is worth noting that the Irish State does not need a referendum to leave the European Union should that become the policy of its Government. Referendums in the Republic of Ireland are exercises in direct legislation whereby citizens vote to amend or not amend as the case may be the State's written Constitution, which was first adopted by popular referendum in 1937.In the Republic's EEC Accession Treaty referendum in 1972 citizens gave a license or permission to the State/Government to join the then European Communities: "The State may join… " Ireland joined the Communities under a permissive, not a mandatory, power, so the State/Government may exercise the same license to withdraw from the EU if it should come to so wish.

(PS.This text contains some slight stylistic and other improvements to that originally given to the Northern Ireland Affairs Committee, but nothing that subtracts from the content of the original. A new heading has also been added.) 



Biographical Note:

Anthony Coughlan is Associate Professor Emeritus in Social Policy at Trinity College Dublin and Director of the National Platform EU Research and Information Centre, Ireland, an EU-critical think-tank.An economist by profession, he has been a longstanding opponent of EU integration on democratic and internationalist grounds and has written and spoken widely on EU-related matters. He shared platforms with former Labour Ministers Peter Shore and Tony Benn and Conservative Minister Sir Richard Body in the UK referendum on EEC membership in 1975.He was an active campaigner in Republic of Ireland referendums on its 1972 EEC Accession Treaty and on the 1987 Single European Act Treaty, the 1992 Maastricht Treaty, the 1998 Amsterdam Treaty, the 2001 and 2002 referendums on the Nice Treaty, the 2008 and 2009 referendums on the Lisbon Treaty and the 2012 Stability Mechanism Treaty. He was intimately involved in the Crotty, McKenna, Coughlan and Pringle constitutional actions before the Irish Supreme Court, cases that arose largely from his concern for fair procedures in EU-related referendums, and he was himself the successful plaintiff in the third of these.He was invited to make a submission to the Irish Senate Special Select Committee on the Withdrawal of the UK from the European Union in June 2017 and this submission to the House of Commons Northern Ireland Affairs Committee makes points that are broadly similar to that.

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Sunday, 17 December 2017