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Brexit isn’t Ireland’s biggest problem in Europe

Eoin Drea / Dec 2021

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Since the Brexit referendum result of 2016 much attention has focused on Ireland’s perceived ability to influence EU policy on all things British. So entrenched has this view become that even the Economist trumpeted Ireland asan unlikely diplomatic superpower”. And while the issue of Northern Ireland continues to dominate the immediate prospects for the future Anglo-EU relationship, it really isn’t Ireland’s biggest problem in Europe. In fact, it doesn’t even come close.

Because, although maintaining the framework established by the Good Friday Agreement is Dublin’s overriding objective, Anglo-Irish tensions have risen and fallen on Northern Ireland since its establishment in 1921. From the Economic War of the 1930s, the return to violence in the late 1960s and the gradual moves towards reconciliation from the early 1990s on, Northern Ireland and its positioning vis a vis Dublin and London has remained a constant political thorn.

Brexit has, undoubtedly, made Northern Ireland the centrepiece of a more complicated Anglo-Irish-EU relationship. And, yes, the Northern Ireland Protocol has made for a useful (and effective) diversion in Westminster’s broader discussions with Brussels. But, despite the current level of political distrust, it is likely that issues of much wider import – financial services, global trade policy, security and defence – will ultimately be the drivers of London’s future relationship with Brussels. Northern Ireland will not.

In this context, the real challenge for Dublin is posed, not by Brexit itself, but by the changed priorities of a post-British EU. The reality of Ireland as a small, globalised and flexible open economy may come to sit ever more uncomfortably in an EU where Brexit (and the ongoing pandemic) are being viewed as an opportunity to reenergise the wider European integration project.

And while it is perfectly logical for the EU to use these crises as an opportunity to solidify its own structures and expand its legislative reach, such a path does imply considerable challenges for an Ireland still reeling from the psychological effects of Brexit.

Because in Brussels the stated policy of “moving past Brexit” is designed to utilise the EU’s solidarity as a springboard for a more globally assertive, and more integrated, grouping. An EU better placed to deal on a world stage with its perceived competitors, namely China and the United States. This is the underlying objective of the ongoing Conference on the Future of Europe and the oft-stated aim of President Macron.

For Ireland this is a huge problem. Deep economic, cultural and trade relationships tie Dublin firmly to the Anglosphere economies of the United States and Britain. Up to 75% of recent Foreign Direct Investment flows into Ireland come from either the U.S. or Britain. By contrast, only 5% derives from Germany. U.S. companies alone directly employ about 10% of all Irish workers while Irish owned companies in the U.S. and Britain employ over six times as many employees as Irish owned companies in Germany and France combined.

Although much has been made of establishing greater links to Continental Europe post-Brexit, Ireland still remains the last Anglosphere economy standing in the EU.

Across a multitude of areas Ireland is already struggling to balance its Anglo-American underpinnings with the realities of EU membership. Take data protection – as the European HQ of data driven U.S. multinationals such as Google and Facebook/Whatsapp – Ireland finds itself in a pivotal EU regulatory role. However, the recent action of eight other EU national data regulators in disputing Ireland’s recent judgement on Whatsapp (they regarded Ireland’s ruling as too lenient) highlights just how problematic Ireland’s perceived closeness to the United States is for other EU members.

And while the space exists for Ireland to reposition itself at the pro-business end of the EU’s enlarged global ambitions – such a strategy requires a clarity of thought and process on Dublin’s aims for the future development of the EU. Sadly, Ireland’s current strategy for shaping Europe’s development lacks the levels of engagement and finesse that were so evident during Ireland’s prominent role in the Brexit negotiations of 2016-20.

For Ireland, Brexit was a generational political, economic and cultural shock that should force Dublin to pursue a more nuanced approach to EU membership. Because, although ensuring peace in Northern Ireland must always remain a Dublin preoccupation, balancing Ireland’s economic realities with a central place in future EU decision making may be an even more impossible task.

 

Eoin Drea

Eoin Drea

December 2021

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