EU is flawed but Irexit would be a mistake

Online EditorUncategorised

By Cormac Lucey

A new party campaigning for Ireland to leave the European Union has been recently launch. Those involved include Ray Bassett, a former Irish ambassador, and Ray Kinsella, a professor at University College Dublin.

The spokesman is Hermann Kelly, who heads up communications at the European parliament in Brussels for the Europe of Freedom and Direct Democracy group, which includes Ukip and Italy’s Five Star Movement.

While Ireland may still be pro-EU, the same cannot be said for the rest of Europe. The governing party in Hungary, Viktor Orban’s Fidesz Party, has been in a stand-off with Brussels over migration. It is a member of the European People’s Party in the European parliament, along with Fine Gael.

There is a third right-wing political parliamentary group that includes the British Conservatives and the Polish Law and Justice Party, which are also in regular rows with the EU. Each of these three groups wants to take immigration policy back from Brussels.

The EU’s stumbling efforts to have a unified approach to immigration reflect its expansion of powers in the areas of monetary and foreign policy: attempting a continent-wide policy is producing worse outcomes than was the case under a multitude of national policies. In the case of migration, frontline states such as Greece and Italy have been laxer in their border controls knowing that unwanted migrants are more likely simply to pass through their countries to places farther north, such as Germany and Sweden.

Germany and Sweden, however, may be approaching the limits of how many they can admit. The problem with current policy is evident in the rapid rise of the far-right Alternative für Deutschland (AfD) and Sweden Democrats parties and the recent protests in the German city of Chemnitz against a murder allegedly carried out by immigrants.

Things don’t get much better when we look at the common European foreign policy. In many cases, the EU has struggled to get its members to agree to a mutual line on particular questions. In other cases, a united EU policy has made things worse. Sometimes the EU has managed both of these feats at the same time.

The military intervention in Libya to depose Colonel Gaddafi may have allowed Nicolas Sarkozy and David Cameron to pose as strongmen but it ended central government in that country, leaving it as a transit station for migration from central Africa to southern Europe. That intervention was firmly opposed by Germany.

Berlin supported EU policy on Ukraine. On working with the US to seek gradual economic integration and a deepening of political co-operation without Russian acceptance, however, the EU has helped to make things worse. The introduction of the euro was followed within less than a decade by a series of deep economic crises across the eurozone periphery including Ireland, Portugal, Spain, Italy and Greece.

Efforts to remedy that within a single currency zone showed that this was another case of one size does not fit all.

I am deeply sceptical of much that the EU does and I spoke at the public Irexit meeting organised by Mr Kelly in February that featured Nigel Farage as its headline act. Yet I do not intend to join the Irexit party. Why not?

At a very basic level, I don’t share their key objective. I may have severe misgivings over many aspects of the EU and where its current leadership would take us but I don’t believe that Ireland’s national interest would be served by leaving.

Indeed, I believe that if the EU didn’t already exist then we would need to invent something very like it; an organisation that bundled together the economic interests of the democratic states of Europe in a manner that was amenable to democratic accountability.

 

That is especially the case for Ireland. According to a report by the Economic and Social Research Institute in July, median incomes in Ireland have grown by an average of 3.23 per cent a year since 1980; that contrasts with 1.49 per cent in the UK and 0.27 per cent in the US. Over almost four decades, Irish incomes rose to 324 per cent from a base of 100 per cent while US incomes rose to 110 per cent.

Our startlingly strong record is mainly due to our success in attracting foreign direct investment. That success was based primarily on our low corporation tax but it was also based on our membership of the EU. Those in favour of Brexit may bemoan the EU’s tariff walls and characterise them as protectionist but their existence prompted many US companies to set up physical operations behind those walls. Our 12.5 per cent tax rate encouraged them to set up in Ireland.

Irexit supporters may argue that we could leave the EU and retain our advantage by following the Norwegian model. On paper we could. In reality, the assault on our corporation tax regime that is already under way can be far better defended from within the EU, where we retain a veto over tax matters, than without.

In any event, I don’t believe that the EU is inanimate or robotic. It is an evolving political project that must pay heed to its voters. It is clear that they are increasingly unhappy with the EU’s focus on further integration and its failure to deliver on the things they do care about, such as jobs and economic growth.

When Cameron went to Brussels seeking concessions with which to defeat the pro-Brexit campaign as the UK approached its 2016 referendum, he was given one symbolic compromise and nothing of real substance on the red-hot political subject of migration.

The EU’s admission at this time that references to an “ever closer union” did not compel all member states to aim for a common destination was nothing more than an acknowledgment of the reality that the union will have to operate on a multi-speed basis if it is to prosper. Meanwhile, the EU’s insistence on open borders for trade and migration is withering in the face of the migration crisis.

While I have many complaints about the EU, I don’t believe that we should leave it. Nor do I believe that it is an evil empire in the making. I just think that vainglorious politicians have driven it much further and faster than makes good political or economic sense.

I’ll watch the fate of the new Irexit party with interest, but I won’t be joining.

Published in The Times (Ireland edition)

September 6th 2018