Ireland and the European Union
Summary and Keywords
Ireland joined the European Communities—as they were known then—in 1973, alongside the United Kingdom and Denmark. In many ways, that membership was defined by the bilateral British-Irish relationship. Ireland was, to all intents and purposes, an underdeveloped appendage of the British economy, and membership alongside the United Kingdom was deemed by most of the Irish political and economic establishment as virtually axiomatic. Irish policy makers, however, took full advantage of the opportunities offered by membership; in particular the Common Agricultural Policy, the direct transfers that derived from cohesion, regional and structural funding, and the opportunity to present the country as a successful location for Foreign Direct Investment (FDI) with access to the entire European market. Irish policy makers also positioned themselves rhetorically close to the heart of European construction, which had the added value of creating an Irish antithesis to Britain’s ongoing European discontents.
There are perhaps four key themes to be analyzed with respect to Ireland and its membership of the European Union. The first is the question of a small state and its sovereignty. As a former colony, with a bitter experience of imperialism and a strong sense of independence, Ireland’s pooling of sovereignty with its European partners has most often been presented as a desirable trade-off between legal, formal sovereignty and effective sovereignty. Having a seat at the main table—alongside the former imperial hegemon—was deemed to be a major advance, one that allowed the state more effectively to pursue its interests—including the resolution of conflict on the island of Ireland. The 2008 financial collapse, and Ireland’s experience of the EU-led “troika” has profoundly challenged that narrative, with concerns often now expressed at the loss of political and economic autonomy to technocratic multilateral institutions rather than a democratic, transnational European polity. The prospect of Brexit and its consequences for peace and security on the island is also a contemporary challenge in that regard.
A second theme of inquiry is that of Irish economic development within the European Union. In contrast to other similarly under-developed states and regions in the EU, Ireland is seen by many as something of a poster child for making a success of EU membership. In the run-up to the 2004 enlargement and shortly thereafter, Dublin was a magnet for central European and Mediterranean states looking to replicate the success of the so-called “Celtic Tiger.” Debate however persists on the precise balance of costs and benefits deriving from the model of economic development pursued by the Irish state, the role of Irish government policy therein, and the precise added value of EU membership.
A third theme of inquiry is the intersection of local, national, and European democracy. Once membership was secured, the European Union became a central and largely uncontested fact of Irish political life. Early constitutional referenda authorizing ratification of EC and then EU treaty changes, while vigorously contested, were overwhelmingly won by coalitions of the mainstream political parties and sectoral interest groups. With both the Nice (2001) and Lisbon (2007) treaties, however, ambivalence, antagonism, and complacency combined initially to thwart ratification. The gap between popular opinion on EU treaty change, which ultimately divided roughly 60/40 in favor, and the near unanimity among political elites and sectoral interests, opened a conversation on the relationship between local, national, and European democracy, which is as yet unresolved, but which many see as having further centralized policy making and distanced it from effective democratic control.
A fourth theme is that of Ireland and Europe in the world. Ireland joined the European Communities with no expressed reservations on its further political integration, but as the only non-member of NATO. During those initial debates, economic arguments overwhelmingly predominated, but the political issues were aired and the implications for Ireland’s traditional neutrality were robustly discussed. The subsequent membership of other non-aligned states ought, on the face of things, to have made Ireland’s position all the more secure. Thus, with a long and popular history of UN peacekeeping and active international engagement, the development of European foreign, security, and defense policies should not have proven to be problematic. In fact, neutrality, security, and defense remain neuralgic issues for Ireland within the European Union and have contributed in a very modest way to the challenges faced by the Union in its attempts to craft a coherent and credible common security and defense policy. This speaks to debates surrounding Ireland’s proper place in the world, the lessons of its own history and the perceived capacity for smaller states to shape the international community.
These four themes underpin much research and analysis on Ireland as a member of the European Union. In an unstable contemporary climate, with many well-established expectations under threat, they also serve to identify the pathways available to navigate beyond political and economic instability both for Ireland and the wider European project.
Ireland joined the European Communities—as they then were—in 1973, alongside the United Kingdom and Denmark. In many ways, that membership was defined by the bilateral British-Irish relationship. Ireland was, to all intents and purposes, an underdeveloped appendage of the British economy and membership alongside the United Kingdom was deemed by most of the Irish political and economic establishment as virtually axiomatic. Irish policy makers, however, took full advantage of the opportunities offered by membership; in particular the Common Agricultural Policy, the direct transfers that ultimately derived from cohesion, regional and structural funding, and the opportunity of presenting the country as a successful location for Foreign Direct Investment (FDI) with access to the European market. Irish decision makers also developed a policy style within the EU that has been described as “consensual, collegial, and pragmatic” (Laffan & O’Mahoney, 2003, p. 31) while at the same time positioning themselves rhetorically close to the heart of European construction. This had the added value of creating an Irish antithesis to Britain’s ongoing European discontents.
There are perhaps four key themes that have occupied scholarship with respect to Ireland and its membership of the European Union. The first is the question of a small state and its sovereignty. It is a point of ongoing interest to understand and to explain why a small state—which secured its formal independence only in 1921, and which continues to grapple with issues of sovereignty and nationality—should be so willing to enter into a complex shared sovereignty arrangement with other European states, including its former colonizer? A second question of evident scholarly interest has been the economic development of the state within the EU. What was the impact of EU membership on a fragile, largely agricultural, peripheral European economy? How did European engagement contribute to Ireland’s stunning economic successes in the 1990s, and what was its role in Ireland’s economic crisis of 2008–2013 and subsequent recovery? A third series of questions relate to the EU and democracy. To what extent has Ireland’s engagement with European integration strengthened or weakened its own democracy, and how engaged are citizens with the European project? Finally there’s the issue of Irish foreign policy. How and why has Ireland’s tradition of military neutrality, which was an outlier within the EU throughout the Cold War, continued to impinge on both domestic debates on Europe, and how has it shaped Ireland’s contribution to EU foreign, security, and defense policy?
Membership and Sovereignty
As a former colony, with a bitter experience of imperialism and a strong sense of independence (Lee, 1989), Ireland’s pooling of sovereignty with its European partners has most often been presented as a desirable trade-off between formal sovereignty and effective sovereignty. Having a seat at the main table—alongside the former imperial hegemon—was generally deemed to be a major advance, one that allowed the state more effectively to pursue its interests—including the resolution of conflict on the island of Ireland (Hayward, 2013; Meehan, 2000). The 2008 financial collapse, and Ireland’s experience of the EU-led “troika” 2010–2013 has profoundly challenged that narrative, with concerns now widely expressed at the loss of political and economic autonomy to technocratic multilateral institutions rather than a truly democratic, transnational European polity (Thorhallsson & Kirby, 2012). The prospect of Brexit and its consequences for prosperity, peace, and security on the island is also a contemporary challenge in that regard.
Membership and the Economic Imperative
Irish policy makers approached membership of the early European Communities from three primarily economic aspects: (a) membership as a function of economic dependence on the United Kingdom, (b) membership as offering direct and immediate economic advantages, and (c) membership as underpinning a new economic development strategy (Coombes, 1983; Keatinge, 1991; Murphy, 1997). The July 5, 1961 declaration from Taoiseach (Prime Minister) Sean Lemass could not have been clearer on the first point: “in the event of the United Kingdom applying for membership of the EEC, we also will apply” (cited in Hayward 2012, p. 132). This position reflected certain realties of Ireland’s economic position, inter alia that upwards of 80% of Irish exports were going to the United Kingdom, and that these exports were overwhelmingly from the critical agricultural/farming sector. Ireland had not joined the European Free Trade Association (EFTA) in 1960 due largely to the exclusion of agricultural trade from that framework. The EEC was a significantly different proposition, in that not only was agriculture included, but the price support mechanisms promised by the EEC’s new Common Agricultural Policy (CAP) would entail direct and immediate cash transfers to Irish producers. EEC membership would also underpin a newly emerging export-led economic development policy. In the late 1950s, Irish policy makers had shifted decisively from an unsuccessful trade protection policy to one of export-led growth and encouragement of foreign direct investment (Breen & Dorgan, 2013). At the same time, Irish negotiators made it clear that they sought special provisions in light of Ireland’s relative economic underdevelopment (Maher, 1986). It is this last point that begins to hint at the issues that were to underpin Irish membership debates as regards sovereignty—and which have come back into focus in recent years.
While the two largest parties (Fine Gael/EPP and Fianna Fáil/ALDE) and major sectoral groups highlighted the economic necessity and opportunities of membership—especially for farmers and rural communities, the much smaller Irish Labour Party/PES and the closely associated trade union movement were initially opposed (Dooge & Barrington, 1999; Drudy & McAleese, 1984). Their arguments centered on an alternative economic development policy that prioritized the sovereign capacity of Irish governments to make their own economic choices based on the unique character of the Irish state and economy (Orridge, 1974). In particular, they championed the interests of Irish industrial workers, whose jobs had been sheltered behind high tariff walls, and whose food costs would rise to accommodate higher prices to farmers. They also highlighted the implications of a loss of sovereign control over Irish resources (fisheries, land, forestry, oil, and gas) to the depredations of a “free” capitalist market. Finally, they argued that as a small, peripheral state, Ireland would be at a permanent structural disadvantage in defending its interests within the EEC institutions. More radical voices—from individuals further to the political Left and from those associated with armed militant nationalist forces—insisted that any abridgement of national sovereignty was repugnant to Irish history and to those who had fought for Irish freedom just 50 years earlier. Across the political Left, too, there were concerns with sovereignty related to foreign policy and defense; in particular, as the only non-NATO member in the EEC, Irish neutrality would come under pressure, and a distinctive Irish foreign policy voice would be lost.
Following the delay to membership negotiations caused by the 1961 French veto of United Kingdom membership, a referendum on EEC membership was ultimately held in Ireland on May 10, 1972. In a turnout of over 70%, 83% of those voting endorsed membership. The scale of the victory was such that the Labour Party—with a significant proportion of its members already unconvinced by the party’s initial hostility to the EC—moved to a supportive if critical position on membership.
Sovereignty concerns were largely sublimated over the next few decades as the tangible returns on European integration made themselves felt, first in the agricultural community and then later in the wider economy (Sheehy, 1980). Irish negotiators had secured a range of temporary derogations and special treatment across a number of sensitive economic sectors (textiles, shoes, automotive, fisheries) but as these protections were phased out, these areas declined (Maher, 1986). As other areas of economic activity developed, these losses did not generate significant ongoing political attention and, on balance, the sovereignty costs of membership were not highlighted other than at the political margins.
Sovereignty and Northern Ireland
In fact, in key respects, sovereignty arguments were consciously deployed by those who were enthusiastic about European integration. On Northern Ireland, for example, it was argued that joint Irish and UK membership of the EEC served to diminish the significance of the intra-island border between Northern Ireland (as part of the United Kingdom) and the Republic of Ireland, legally guaranteeing free movement of people, services, trade, and goods (FitzGerald, 1991). More broadly, it also provided for a much closer and more equal bilateral relationship between Irish and U.K. ministers sitting beside one another at EEC ministerial council meetings and allowing for close working relationships between senior officials, which would not have been possible in a strictly bilateral relationship (Meehan, 2000). Finally, it offered opportunities for politicians, north and south of the border, to work in partnership on issues of close mutual interest such as agricultural price supports and structural funding for disadvantaged border regions (Tannam, 1999).
Ireland, Sovereignty, and EU Institutions
Sovereignty concerns returned, however, with proposals for treaty change. The first set of amendments to the founding treaties—and which set the stage for the creation and completion of the 1992 single market program—were packaged together as the 1986 Single European Act. Irish government efforts to ratify the treaty through parliament came unstuck when long-term campaigner against Irish EEC membership, Dr. Raymond Crotty, argued successfully before the Supreme Court that plans to formalize intergovernmental foreign policy cooperation among EEC member states was a material change to the terms of Irish membership and that this required formal constitutional ratification. Subsequent legal advice from consecutive Attorneys General has resulted in constitutional referenda to ratify each and every change to European Union treaties.
Irish official attitudes to the subsequent institutional development of the European Union through the Maastricht (1992), Amsterdam (1998), Nice (2001 and 2002), Lisbon (2008 and 2009), and European Fiscal Compact (2012) treaties are illustrative of Ireland’s wider approach to pooling and sharing sovereignty (Dorr, 2012). While Irish governments have never been to the foreground in these institutional debates, they have been consistent in presenting the view that—with the notable exceptions of taxation, security, and defense, Irish interests are best defended in the equal application of EU law, the community method of decision making, and the central role of the European Commission as guardian of the treaties and initiator of legislation. Similarly, they have been cautious about the development of the European Council, generally skeptical on the utility of the national veto (again, with the exceptions above), and cool towards granting additional powers to the European Parliament (Laffan & O’Mahony, 2008; McDonagh, 1998). Popular attitudes have been more nuanced. In all cases—and successfully in 2001 and 2008—opponents of treaty change have insisted that moves towards greater qualified majority voting (QMV), loss of national vetoes, reweighting of national voting strengths, and diminished representation in the European Parliament were inimical to Irish interests (O’Mahony, 2009). The proposed loss of the automatic right to nominate a member of the European Commission in the 2007 Lisbon Treaty was a particularly high salience issue for voters in deciding initially to reject its ratification. Its retention was a significant part of the package leading to a positive second vote on that treaty in 2009 (Dinan, 2009).
It is the 2010–2013 experience of the “Troika” (EU Commission, European Central Bank, and International Monetary Fund [IMF]) that reignited, at least to some degree, the sovereignty question in Ireland’s EU membership. Ireland had only briefly possessed an independent currency,1 and so arguments about entering the new euro single currency in 1999 did not excite major principled arguments. However, when following the 2008 global financial crisis, the Irish government was shut out of international money markets to fund its borrowings, the European Central Bank (ECB) eventually threatened to withdraw its own emergency liquidity assistance (ELA) to Irish banks. Excluded from the wholesale money markets, these banks had become wholly reliant on this ECB funding mechanism, and leading figures within the ECB insisted that the position of Irish banks had to be regularized within normal market parameters. The ECB insisted that an IMF-led bailout was the only means by which this could be secured. For its part, the Irish Government insisted that they could ride out the temporary market turbulence.
The ECB—and in particular its president—insisted that a formal bailout was required, and began to brief internationally to that effect. It also insisted that, within the terms of such a bailout, all obligations to the bondholders of failed Irish banks had to honored in full. No bank could be allowed to fail, and no bondholder could be out of pocket. In November 2010, Ireland applied for an €85 billion IMF bailout. As well as imposing a program of significant and painful economic austerity through the Troika’s restructuring program,2 this meant that Irish taxpayers shouldered the entire obligation of bailing out Irish banks, to the tune of a total of €64 billion, or 40% of national GDP (Donovan & Murphy, 2013). The role of the ECB—its democratic legitimacy and its effectiveness—came in for considerable criticism. Unaccountable European technocrats were widely seen as having prioritized the interests of German and French banking institutions—because of their exposure to Irish bank debt—over those of Irish and European citizens, and all in the name of alleged systemic financial dangers. The fact that later euro-zone bank bailouts explicitly demanded bondholder “haircuts” only underscored the perceived injustice. This was further exacerbated as it became clear that within the Troika that the IMF had advocated more strongly for Irish interests than had the European Commission in the face of ECB obduracy (Whelan, 2014). This fed a strong political narrative surrounding the lack of democratic accountability in core EU institutions.
Sovereignty issues have also arisen with the 2016 decision of the United Kingdom to leave the European Union. While a bilateral dependence had given way to a multilateral interdependence over 40 years of membership, Irish policy makers had to face the prospect of unpicking this tightly woven relationship. The nature of the intra-island border, the status of Irish citizens in the United Kingdom, defending the bilateral Common Travel Area, and recasting North-South and East West relations among the various national and regional governments were all drawn into question (Barrett & Morgenroth, 2016; Todd, 2015; Tonge, 2016). Ireland’s role was all the more challenging as its over-riding interest was to keep the two parties (United Kingdom and EU) as close as possible (so as minimize difficult policy choices), while at the same time negotiating as part of the EU27.
Brexit thus initiated something of a debate on Ireland’s strategic position vis á vis the United Kingdom and EU26, as the prospects for a “soft” Brexit diminished. Unpalatable choices now had to be faced. While only a handful of serious commentators (McGee, 2016; Münchau, 2016) suggested following the United Kingdom out of the European Union, the degree to which Ireland should reinforce or weaken its links to the EU26 became germane. For some, the deep and profound bilateral links between the United Kingdom and Ireland—and most especially concerns surrounding the border between Northern Ireland (U.K.) and the Republic of Ireland—necessitated a “special deal” from the EU. In some quarters, that special deal had to encompass not only further differentiation on free movement of persons (already facilitated by Ireland’s non-Schengen status), but also new exceptions made to EU customs and regulatory requirements for the freest-possible movement of goods across the intra-Irish border. It was even suggested that, in pursuit of such differentiation, Ireland might threaten to leave the Union as a negotiating strategy. For others, an approach built upon further differentiation from the EU26 in an attempt to bridge the ever-widening gulf between the United Kingdom and EU26 was seen as unrealistic and undesirable. At the same time, there were very few voices suggesting that Ireland double down on even closer links to EU26 by, for example, abandoning the Schengen opt-out. No easy choices were visible.
A second theme of inquiry in Irish EU membership is that of Irish economic development within the European Union. In contrast to other similarly under-developed states and regions in the EU, Ireland is seen by many as something of a poster child for making a success of EU membership (Breathnach, 1998; MacSharry, White, & O’Malley, 2000; O’Hearn, 1998). In the run-up to the 2004 enlargement and shortly thereafter, Dublin was a magnet for central European and Mediterranean states looking to replicate the success of the so-called “Celtic Tiger.” Debate persists, however, on the precise balance of costs and benefits deriving from the model of economic development pursued by the Irish state, the role of Irish government policy therein, and the precise added value of EU membership (Barry, 2000; Kirby, 2004).
As noted above, Ireland’s starting position in Europe was as an underdeveloped appendage of the U.K. economy, heavily dependent on primary agricultural production. The shift of economic strategy from the late 1950s was credited as having born fruit, with accelerated foreign direct investment—especially from the United States. This had been secured, in part, as a result of Irish taxation policy, with an initial zero rate tax on export manufacturing profits, negotiation of the 1965 Anglo Irish Free Trade Agreement, and accession to the General Agreement on Tariffs and Trade (GATT) in 1967. By the time Ireland joined the EEC in 1973, Ireland had developed a modest export-oriented manufacturing capacity (Ruane & Gorg, 1999).
Economic Impact of Membership
Membership of the EEC significantly accelerated employment in foreign-owned industry by almost 40% in the first decade of membership. This was not enough, however, to offset declines in traditional local manufacturing employment squeezed by competition in the EEC and worsened by poor public policy choices and global recessions following the 1979 oil crisis. The Irish economy was significantly bolstered by two impacts. The first from guaranteed Irish agricultural price supports, which amounted to between 2% and 4% of GDP (Matthews, 1987, 1995, 2000). According to Matthews the trade effect of this—the differential between EEC prices and unregulated global prices—added another 1.2% of GDP from the mid- to late 1980s. The significance of these price supports is illustrated by the fact that one of the only times that Ireland threatened to exercise a national veto in European negotiations (with an associated walk-out from the European Council summit by the Taoiseach) was in 1984, over the issue of milk production and proposed levies to reduce EU-wide production. Expansion of the Irish dairy industry was seen by the Taoiseach as being “the largest single potential advantage to Ireland” deriving from EEC membership and “the equivalent of the oil and gas industry to the UK” (FitzGerald, 1991).
A second significant input was EEC structural funding. While initially focused on funds from within the Common Agricultural Policy and small programs linked to social policy, structural funding became a critical economic generator when structural funding was effectively doubled from 1989. This had a two-fold effect as this external funding supplemented (and in some cases replaced) national funding, allowing for both expansionary tax decreases and more targeted and sustained infrastructural investment (McAleese, 2000). This funding, in the ten years after 1989, amounted to almost 3% of GDP per annum, nearly matching the amounts flowing into Ireland from the Common Agricultural Policy. The resources were split nearly equally between soft and hard infrastructure; education, training, and skills development on the one side, with new roads, ports, industrial facilities, and agricultural infrastructure on the other. It is estimated to have added just over half of 1% to the GDP growth rate of the period (Barry, Bradley, & Hannan, 2001). Significantly, the planning and management underpinning this expenditure was subject to tough EU rules on project evaluation, which is argued also to have had a significant impact on overall public administration as these models were copied and incorporated across the Irish public sector (FitzGerald, 1998).
Ireland, Europe, and Corporate Taxation
As noted above, Irish industrial policy was predicated on open access to European markets and on attracting foreign direct investment. Ireland’s structural advantages in terms of language, education, rule of law, and political stability were offset by its peripheral geographic position, poor transport infrastructure and small local market (O’Donnell, 1998; Hardiman, 2005). Ireland’s FDI-based development model was deliberately structured into its EEC membership, moving from the aforementioned zero tax rate on manufactured export profits to a 10% manufacturing tax rate in 1999, and finally a 12.5% corporate rate across all industries in 2003. This was consciously designed to attract not only manufacturing but also industries in the business and financial services sector. The success of this model attracted controversy within the EU. Between efficiency and demonstration effects (Barry, Gorg, & Strobl, 2003), Ireland has as a direct result developed high profile capacity in pharmaceuticals and chemicals, medical technologies, computer and electronic equipment, and technology and social media services. FDI now accounts for 175,000 people in direct employment, 120,000 in indirect employment, and over €125 billion exports in goods and services. In the eyes of several European partners, that success has been partially bought at the expense of investment and jobs in their own countries and has contributed to demands for a level playing field in corporate taxation or at least agreed parameters through which economic activity in one member state is visibly linked to its taxation receipts (Bettendorf, Devereux, Van der Horst, Loretz, & De Mooij, 2010).
Economic and Monetary Union (EMU) and the subsequent introduction of the euro in 2002 certainly facilitated Ireland and its partners to create more stable conditions for firms making long-term investment decisions and reducing cross-border transaction costs. It contributed too to the development of the so-called “Celtic Tiger” of the 1990s (O’Leary, 2015).
The Celtic Tiger
Until the mid-1980s, Irish per capita GNP was among the lowest in the European Union, at less than 65% of the EU average. By the end of the 1990s, based on a favorable global context, the contribution of structural funds, the benefits of the single market, a domestic model of social partnership, and fiscal and monetary policies driven by the goal of EMU, Ireland achieved rough GDP per capita parity by the end of the 1990s. From 1999, EMU was added to the mix, contributing cheap money and easy access to a pool of Eurozone financing. Notwithstanding earlier warnings that Irish and European business cycles were mismatched (Neary & Thom, 1997), Irish policy choices added further fuel to the economic furnace, with rapid increases in domestic consumption and lending. By the early 2000s, the virtues of open markets and limited or “light touch” economic and financial regulation were seen to deliver, with Irish per capita GDP at over 120% of the EU average (Dorgan, 2006).
By the early 2000s, that model of light touch regulation was gaining increased attention at home and abroad. In an article on the insurance industry, The New York Times referenced Ireland as being “the wild west of European finance.”3 As part of its budgetary oversight responsibilities, the European Commission regularly criticized the pro-cyclical policies of the Irish government, generating the political reaction from the Irish Finance Minister, in 2001, that this just represented the “jealousy” of other European governments of Ireland’s economic success (Kennedy & Sinnott, 2007, p. 67).
As noted, however, it was precisely the weakness of EU authority and the absence of effective economic governance within the Eurozone that contributed to the system’s near collapse in 2009–2010, and which deepened and worsened the magnitude of Ireland’s own economic collapse just months earlier.
Public Opinion and Democratic Development
A third theme of inquiry is the intersection of local, national, and European democracy. Once membership was secured, Europe became a central and largely uncontested fact of Irish political life. Early constitutional referenda authorizing ratification of EC and then EU treaty changes, while vigorously contested, were overwhelmingly won by coalitions of the mainstream political parties (Fianna Fáil/ALDE, Fine Gael/EPP, and Labour/PES) and sectoral interest groups. With both the Nice and Lisbon treaties, however, ambivalence, antagonism and complacency combined initially to thwart ratification. The gap between popular opinion on EU treaty change, which ultimately divided roughly 60/40 in favor, and the near unanimity among political elites and sectoral interests, opened a conversation on the relationship between local, national, and European democracy, which is as yet unresolved, but which many see as having further distanced policy making from effective democratic control.
On the core institutional debates surrounding the development of the European Communities and later the European Union, Ireland has been described as “a constructive and communautaire EU member state” (O’Mahony, 2009, p. 439). Others have noted Ireland priding itself for being “a model member state … close to the heart of the European project” (Hayward, 2013, p. 131). This has been—as noted above—grounded in Irish support for the central policy role of the European Commission, dedication to the “community method,” and commitment to the full and equal application of EU norms, rules, and law. At the same time, Irish policy makers have never been starry-eyed idealists. Their real and rhetorical commitment to European construction has also been core to Irish political and economic self-interest. Irish policy makers have also been tactically adept at translating political capital generated within European institutions into policy deliverables such as long derogations from problematic legislation, special consideration for Irish policy peculiarities, or simply general support for a liberal, free-trading state at the European periphery. For EU policy makers, Ireland has proven to be an adept pupil and one whose successes (and its more recent failures) offer apposite lessons for other peripheral states seeking successfully to leverage their EU membership.
Democracy and Europe
The Irish European policy model has been less adept at marrying its European ambitions with domestic politics. So long as Ireland was a net beneficiary from its EU membership, domestic European debates remained shallow and narrowly focused. Tangible economic self-interest rested at the heart of debates, such that the referendum debate over the 1992 Maastricht treaty focused more on the precise numbers of billions of pounds Ireland was to receive in structural funding than on the implications of its commitment to economic and monetary union (Holmes, 1993). Moreover, the exploitation of opportunities arising from membership frequently outweighed other considerations. The executive-centered nature of Irish central government (O’Brennan, 2012) and the exceptionally weak nature of local government were reinforced by European policy structures. For many years, for example, Ireland was a single region for the purposes of EU structural funding (Boyle, 2000). This meant that the Department of Finance was the single lead agency in policy planning and implementation, working directly with the European Commission on all aspects of regional, structural, and cohesion funding. While this was bureaucratically efficient and tended to maximize transfers, it frequently undermined broader European principles of regionalization and subsidiarity. This was exemplified when Ireland’s economic success necessitated the creation of new regions capable of meeting qualification criteria for continued structural funding. These regions had no local governance structures behind them, being created solely for the purposes of accessing funding and again leaving the Department of Finance in pole position.
At the height of the “Celtic Tiger,” with full employment, economic growth outstripping all EU partners, and per capita GDP at the top of the European league table, Ireland’s shallow roots in the European project were suddenly exposed. With the exception of the membership referendum, turnout in subsequent European treaty referenda had been typically lower than at general elections, averaging out at 52% across the Single European Act, Maastricht, and Amsterdam treaties. With the June 2001 Nice treaty referendum, turnout collapsed to just 34.9%, with 54% of these voting against ratification. The result reflected a certain degree of complacency and ambivalence on the part of the political establishment. The Minister of Finance—long the subject of Commission complaints for Ireland’s expansionary fiscal strategy—insisted that the treaty’s rejection had been a “remarkably healthy development” (The Irish Times, June 16, 2001).4 His cabinet colleague, Sile de Valera, had the previous year sought to open a debate on Ireland’s European future, insisting that the EU “can often seriously impinge on our identity, culture and traditions” and that “the bureaucracy of Brussels does not always respect the complexities and sensitivities of member-states” (The Irish Times, September 19, 2000).5 She was seen, in turn, as reinforcing earlier criticism from the Tánaiste (Deputy Prime Minister), that the EU was becoming too intrusive, that Ireland opposed “a more centralized Europe, a federal Europe,” and that the country had based its successful economic model on Anglo-American foundations of “low taxation, economic liberalization, and in essential but not over-regulation—unlike many other EU countries.” (The Irish Times, August 26, 2000).6
The Nice Treaty rejection was followed by a period of political reflection through an all-party National Forum on Europe (O’Brennan, 2004). One of the outcomes here was a new focus on parliamentary scrutiny of EU legislation—which had traditionally been haphazard and poorly managed (Laffan & O’Mahony, 2007; O’Halpin, 1995). The government also sought to address specific public concerns on neutrality with a constitutional amendment to forestall membership of an EU-based military alliance, and agreement with EU partners on a series of explanatory treaty-linked declarations (Seville Declarations) related to European defense. The Nice treaty was then successfully proposed for ratification in October 2002 (Hayward, 2003). In analysis following the first referendum, a number of features underpinning the “no” vote had been highlighted (Sinnott, 2001). Thus, while headline support for continued EU membership was strong, this was based on poor actual knowledge, indifference and/or ambivalence towards the EU itself, increasing concern for national sovereignty, and specific policy concerns related to neutrality and certain social issues—most notably abortion. This pattern was largely repeated with the 2007 Lisbon treaty and the initial 53% vote (in a 53% turnout) to reject that treaty.
In that 2007 Lisbon Treaty referendum defeat, the political establishment was again deemed partially culpable. Both the Taoiseach and the former Minister for Finance (now an EU Commissioner) acknowledged that they had not read the treaty from cover to cover, and yet were advocating its approval. The referendum campaign was also used by the political parties as a means to raise the profile of candidates in concurrent local elections rather than primarily to canvass for EU treaty change. In the aftermath of defeat, the Government again commissioned research which (again) concluded that voters’ lack of knowledge of the EU, concerns with specific policy issues, and domestic politics—especially an unpopular government—had combined to undermine the (limited) campaign to ratify the Lisbon Treaty (Sinnott & Elkink, 2010). The report noted that a low level of knowledge substantially increased the likelihood of a “no” vote, not least due to misperceptions as to what the treaty actually contained. Notwithstanding strong support for the EU in very general terms, specific policy concerns included the loss of an Irish seat at the Commission, taxation policy (including defense of Ireland’s corporate tax rate regime), workers’ rights, neutrality, and abortion. Support was also weakest in specific demographic groups; women, urban manual workers and young people. Together, these results underscored the fact that Irish referendums on EU treaties had by now become highly contested substantive affairs evidencing “twin elements of elite withdrawal and populist capture” (O’Mahony, 2009, p. 430).
While the second Lisbon treaty referendum in 2009, and the 2012 Fiscal Treaty were passed comfortably (by 67% and 60% respectively), they did so in a profoundly different context—that of a major, near existential, shock to the Irish economy. Certainly, the engagement of civil society and sectoral interest groups in both referenda was far higher than hitherto, but post-referendum analyses centered on the economic rationale behind both “yes” votes. Whether out of fear or out of hope, the Irish electorate was characterized as having voted in expectation that a vote for the Lisbon Treaty and the later Fiscal Treaty were necessary to economic recovery and to the generation of employment, and that this represented a hard-headed assessment of Ireland’s place in Europe and the national interest (Costello, 2014; Tonra, 2009).
Foreign Policy and International Security
A fourth major theme in the study of Ireland and its EU membership is that of Ireland and Europe in the world. Ireland joined the European Communities with no expressed reservations on its further political integration, but it joined as the only non-member of NATO. During those initial membership debates, economic arguments overwhelmingly predominated, but the political issues were aired and the implications for Ireland’s traditional neutrality were robustly discussed. The subsequent membership of other non-aligned states ought, on the face of things, to have made Ireland’s position all the more secure. Thus, with a long and popular history of UN peacekeeping and active international engagement, the development of European foreign, security, and defense policies should not have proven to be problematic. In fact, neutrality, security, and defense remain neuralgic issues for Ireland within the European Union and have contributed in a very modest way to the challenges faced by the Union in its attempts to craft a coherent and credible common security and defense policy. This speaks to debates surrounding Ireland’s place in the world, the lessons of its own history, and the capacity for smaller states to shape the international milieu.
The UN Legacy
Ireland joined the European Communities at the close of what many continue to characterize as a “golden age” in Irish foreign policy (O’Driscoll, 2012). Ireland had joined the UN in 1955, as part of a Cold War package deal between East and West, but Irish diplomats had swiftly carved out a distinctive role that was firmly Western in values and orientation, but without the political or diplomatic baggage of military alignment to NATO (Dorr, 2012). This somewhat anomalous status provided Irish ministers and diplomats some room for maneuver on the world stage and led to distinguishing Irish positions on decolonization, apartheid, the representation of China on the UN Security Council, and on disarmament. As an illustrative example, the 1958 “Irish resolution” on disarmament ultimately led to the negotiation of the Nuclear Non-Proliferation Treaty (NPT), just ten years later. The Irish Foreign Minister, Frank Aiken, was invited to be its first signatory in view of his own role in its genesis.
It is difficult to say whether this independent-minded diplomacy would have survived in a UN that was becoming substantially less western and less northern in its political complexion. It is, however, certainly true to say that Irish political leaders insisted in conversations with their European counterparts—all of whom were NATO members—that Irish neutrality would be no barrier to Ireland’s full commitment to economic and political integration. Domestically, however, the argument was made rather differently. While the Labour Party and others of the political Left warned of the foreign policy implications of Europe, and the dangers this might ultimately pose for Ireland’s military neutrality, proponents of membership insisted that the treaties themselves included nothing that would necessarily constrain foreign policy, and certainly nothing that impinged on military neutrality.
Contestation and Conflict
Over the course of subsequent decades and the development of closer foreign policy cooperation, first with European Political Cooperation (EPC), then the development of the Common Foreign and Security Policy (CFSP), and finally the Common Security and Defense Policy (CSDP), Ireland’s position has continued to be problematic—both domestically and within Europe. Domestically, each and every development of European foreign and security policy has been contested. It was the sole ground of success in Dr. Raymond Crotty’s challenge to the ratification of the Single European Act. In all previous Irish referenda on EU treaty changes (Single European Act, Maastricht, Amsterdam, Nice, and Lisbon), the allegation that the Union was on the path to the creation of a European Army has been potent weapon for “No” campaigners and a near-toxic issue for “Yes” campaigners (Garry, Marsh, & Sinnott, 2005; O’Brennan, 2009; O’Mahony, 2009; Sinnott & Elkink, 2010). The success of this argument in stirring up public anxiety—including conjuring up the prospect of conscription to a European army, or the introduction of legal requirements to increase national defense spending—led directly to the introduction of specific EU treaty protocols and formal EU Council Decisions defining the parameters of Irish engagement in European defense cooperation (see European Council, 2002). With the 2002 Nice Treaty referendum, Article 29.4.9 of the Irish constitution was amended to provide that “The State shall not adopt a decision taken by the European Council to establish a common defense pursuant to Article 1.2 of the Treaty referred to in subsection 7 of this section where that common defense would include the State” (Constitution of the Republic of Ireland, as amended, 2015 ). This represents a definitive constitutional barrier to Irish participation in an EU common defense.
Within Europe, Ireland’s unique position has been visible but not materially germane—except in so far as it has delayed treaty change in the case of both Nice and Lisbon. Instead, it has been largely obscured by deeper European debates between Atlanticists and Gaullists, and it has had a far less dramatic profile than member states such as Denmark or (periodically) Greece. In such a universe, Irish diplomats have striven mightily to ensure that formal texts and treaty provisions always make provision for Irish neutrality—even when such references may be seen as opaque and complex. This has led to several circumlocutions with a very unique Irish stamp; such as the distinction made in the Single European Act between discussions of the political and economic aspects of security (which were allowed) and the discussion of security (which was not), and the Union’s nascent common defense policy, which “shall not prejudice the specific character of the security and defense policy of certain Member States,” which was designed, inter alia, to encompass Ireland’s military neutrality.
Making a Success of Foreign Policy Cooperation
While Ireland’s position was anomalous throughout the Cold War, the accession of other European states such as Austria, Finland, and Sweden, and later Cyprus and Malta, underpinned the variegated nature of EU member states’ defense policies. Within this even broader universe, Irish policy makers worked to present Ireland as a constructive and active partner on a number of key issues such as development cooperation, international justice, and human rights and has worked to make a substantive contribution to CSDP missions and operations.
A very high political premium is also placed domestically on Ireland’s contributions to international security through its engagement with peacekeeping and other overseas military operations, including those of the EU through the Common Security and Defense Policy. Those contributions, which (under Irish legislation) must be formally validated by UN authorization, are highly prized and a point of national pride (Murphy, 2012). To that end, cooperation in EU defense is most often validated as either another pathway (alongside traditional UN operations) to making that contribution and/or a means by which the Irish military can develop the training and experience necessary to make its contributions more effective. While Irish military engagement with EU security and defense structures is rarely promoted publicly, significant and positive attention has been derived from high-profile Irish engagement with selected EU military operations, such as those commanded by Irish officers (for example, EUFOR Chad and EUTM Somalia), and those with well-defined humanitarian objectives.
Within larger debates on the development of European security and defense cooperation per se, most public discourse is driven by concerns surrounding the protection of neutrality. Ireland’s relatively benign geo-strategic position allows for a debate on defense almost entirely divorced from considerations of national territorial defense (Jesse, 2006; Tonra, 2012). Sporadically, Irish public figures—usually retired politicians—speak out in terms of a more robust Irish contribution to collective European security and defense, but such debates are one-sided and short-lived.
There are also a limited areas of foreign policy in which Ireland consciously maintains something of an outlier status vis a vis its EU partners: on the Middle East and with respect to nuclear disarmament. On the issue of Israel/Palestine, Irish governments have adopted a very forward-facing position with respect to the establishment of a Palestinian state and the status of the Occupied Territories—insisting, for example, that goods produced in these latter areas and imported to the EU be clearly labeled as such. On nuclear disarmament, Ireland continues to work with non-EU international partners to promote disarmament, and now also, for a definitive international declaration to outlaw nuclear weapons in their entirety—even as most of Ireland’s EU partners rely on nuclear weapons and associated strategies for their own defense.
Ireland’s membership of the European Union vividly illustrates key questions and areas of ongoing scholarly enquiry. First, it opens a conversation on the nature of sovereignty and national independence in an interdependent world. Even as the United Kingdom negotiatesits withdrawal from the Union—based on concerns with regaining its national sovereignty—a small neighboring state, whose own sovereignty was traduced for centuries by that very same state, continues to view its EU membership in broadly positive terms. In the Irish calculation, the balance between formal sovereignty and effective sovereignty appears firmly to come down in favor of sharing or pooling power within a transnational polity. At the same time, the responsiveness of that polity and its institutions to the demands of democratic accountability are all the more important. The “passive consensus” no longer sustains the integrative process, and national publics—including that of Ireland—have been acutely sensitized to the deficiencies of a European polity that relies too heavily on technocratic competence over visible and lived democratic legitimacy.
Second, Ireland’s European engagement highlights the extent to which economic integration—with the appropriate supports—can deliver prosperity. Little or nothing in 1973 would have suggested that the state would or could have made such an economic success of membership. It highlights too, however, that this was clearly grounded in active market intervention, public investment, and fiscal support from the EU and its member states. For newer member states, the scope for such support has significantly narrowed, and the implications of “austerity” politics has limited still further the possibilities for such states to follow an “Irish path” to European prosperity. Having made such an economic success of membership, Irish economic exceptionalism is now challenged by the logic of equal treatment of corporate taxation within the Union. The extent to which Ireland’s comparative advantage in securing Foreign Direct Investment depends on an outlier corporate tax rate may yet be tested.
Third, Ireland’s European story is something of a case study in how EU member states have yet to square the circle between national democracies and the creation of a transnational polity. As one of the most pro-European populations, it is striking the extent to which Irish support remains transactional and remarkable how little headway the European project has made in connecting substantively with its “citizens.” Ireland is a unique electoral test bed insofar as popular referenda have been undertaken for each change to European treaties. The failure of Irish elites to learn from their Nice and Lisbon treaty referenda experiences are notable, as are the ongoing dynamics between elite and popular opinion.
Finally, there are lessons to be drawn from contestations surrounding Irish foreign, security, and defense policy, and from the development of a Common Foreign and Security Policy for the Union as a whole. On the face of it, it is extraordinary that a state that has gained so much from the solidarity of its European partners has been unwilling to commit to the defense of those same states. At the same time, it is a testament to the nature of that common policy that a neutral state—priding itself on a values-driven foreign policy—can pursue with evident success the foreign policy goals that it holds dear. The questions that remain unanswered center upon the capacity of the Union and member states, such as Ireland, to respond to an evolving geo-strategic security environment that is perhaps far less stable than that either before or after the end of the Cold War.
The above-mentioned themes underpin much research and analysis on Ireland as a member of the European Union. In an unstable contemporary climate, with many well-established expectations under threat, they also identify the pathways available to navigate beyond political and economic instability both for Ireland and the wider European project.
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(1.) From 1922 to 1978, the Irish pound (púnt) was de-facto linked to sterling on a 1:1 ratio, and from 1978, the pound operated within the European Exchange Rate mechanism until Ireland’s entry to the European Union in 1999.
(2.) GNP fell by 10% in the period 2008–2011. Unemployment doubled to 15%. Property prices collapsed by more than 50%. Emigration trebled to 90,000 per year. The real value of all average weekly earnings fell by 11.5% from its 2008 peak.
(3.) For Insurance Regulators, Trails Lead to Dublin, The New York Times, April 1, 2005, http://www.nytimes.com/2005/04/01/business/worldbusiness/for-insurance-regulators-trails-lead-to-dublin.html.
(4.) McCreevy hails “anti-establishment statement”, Mark Brennock, The Irish Times, June 16, 2001. http://www.irishtimes.com/news/mccreevy-hails-anti-establishment-statement-1.313332.
(5.) De Valera says EU directives impinge on our culture. Miriam Donohue, The Irish Times, September 19, 2000. http://www.irishtimes.com/news/de-valera-says-eu-directives-impinge-on-our-culture-1.1104262.
(6.) Challenge of making global capitalism more accountable, Paul Gillespie, The Irish Times, August 16, 2000.