Ray Bassett is a former Irish Ambassador to Canada, head of the Irish Consular Service and Joint Secretary to the British Irish Intergovernmental Conference in Belfast. He is Senior Fellow for EU Affairs at Policy Exchange.
The decision of the British people to depart the European Union places Ireland in a quandary. There is no other EU country so economically, culturally, and historically intertwined with the UK, as Ireland. Therefore, any disruption of EU links with the UK will have a disproportionate effect on the Republic of Ireland.
It is very difficult to see how Ireland’s unique relationship with the UK can be catered for in a negotiation, where its interests are combined with those of the other remaining States.
When Ireland joined the EU in 1973 it was the poorest of the nine Member States, and heavily dependent on the UK economically. Today, Ireland is one of the EU countries with the highest GDP per capita, and has a much more diverse political and economic relationship with the rest of Europe. It is a net contributor to the EU budget.
However, on closer examination, some of the old fundamentals with the UK still have strong resonance. Ireland’s indigenous SMEs and its labour market remain inextricably linked to Britain. The relationship in these areas is still more important to us than our relationship with the rest of the EU.
It is estimated by the Irish Department of Finance that Brexit will result in between 40,000-50,000 less jobs in the economy. It is also estimated that around 600,000 people born on the island of Ireland (all have Irish citizenship) live in Britain. Spain, with less than 18,000 Irish-born residents, is the next most popular, with only around 1/35th of the UK total.
The links between our two islands are to be found in every aspect of society. While Ireland has greatly lessened its dependence on the UK, it is still very heavily reliant on its neighbour’s transport system to export its goods world-wide. Almost 80 per cent of Ireland’s exports travel through the UK transport system. Customs requirements between the two countries could cause serious disruption.
The probability of a re-instatement of the land border with Northern Ireland, post-Brexit, would pose huge difficulties in Ireland. Almost 30,000 people cross the land frontier every day to work. Custom posts would disrupt the daily life of hundreds of thousands of people who live and cross this invisible line in the course of their daily life.
In addition, the abolition of the physical border was a huge incentive to Republicans to support the Good Friday Agreement. The Agreement itself was predicated on both the UK and Ireland being full members of the EU. The danger to the peace process is self-evident.
In addition, the EU is moving in a direction which is not in Ireland’s interests. The election of Macron in France further strengthens the federalist party in Europe, which seeks to strengthen the powers of Brussels.
This is particularly important for Ireland in the areas of Corporation Tax and free trade. The EU commission and President Macron want to introduce changes to the tax code which would make Ireland a much less attractive place in invest. The ability to attract FDI, especially American, has been the cornerstone of Ireland’s economic prosperity. Without the UK, Ireland and like-minded countries such as the Netherlands will find it much harder to resist the Commission and its allies on the tax issue.
It is therefore problematic for Ireland to leave the negotiations to Barnier and the EU. There is a dangerous tendency in Brussels to ensure that Britain is treated harshly, so as to discourage any other deserters. This type of thinking is wholly against the Irish interest: Ireland needs the UK to get the best possible terms. The EU previously demonstrated its lack of interest in the welfare of the Irish people when it foisted an unfair bailout on the Irish taxpayer. This essentially forced Irish taxpayers to cover the private debts of failed banks, especially the rogue Anglo-Irish Bank.
In the circumstances, the question has to be asked seriously as to whether Ireland would be better maintaining its very beneficial links with the UK and seek to negotiate the best possible free trade deal with the remaining 26 EU members. Irexit is coming onto the agenda.