John Bruton

Opinions & Ideas

Category: European Union (Page 1 of 3)

Bruton calls for Brexit negotiating extension

John Bruton, Speaking to RTÉ’s Morning Ireland today.

Former taoiseach John Bruton has called for the two-year Brexit negotiating period to be extended.

Mr Bruton, who is also a former EU Ambassador to the United States, said the time limit is too short and any agreement reached will have to be ratified by the UK and EU parliaments, which also takes a lot of time.

Speaking to RTÉ’s Morning Ireland, Mr Bruton said that pressure for negotiations is too great and that mistakes are inevitably made, when insufficient time is given to negotiations.

Mr Bruton added that the time pressure is adding to a “fevered atmosphere” in British politics, with just over a year left before the negotiating period ends in March 2019.

He warned that Ireland would suffer as much as the UK, if the right deal was not reached.

Mr Bruton said there is a provision for the extension of the two-year negotiating period in Article 50.

He said that there are some downsides to the idea of extending the period and it would have to be reached unanimously.

However, he said the possibility of extending the period would allow for more rational discussion and a better outcome.




I am delighted to be invited to speak at this important launch.  I congratulate Skoda on the recent rapid growth in sales in the Irish market.

I would like to talk this morning about Brexit.

I believe that Brexit will do disproportionate damage to the motor industry, which is one of Europe’s premier industries. It depends for its efficiency on complex supply chains, and these will be disrupted if the UK Government persists with its intention to leave the EU Customs Union and Single Market.

The risk of the UK simply crashing out of the EU remains high. The fact that Mrs May has had to postpone her planned speech on Brexit, points in that direction.  So does her slap down of Philip Hammond for saying that the changes in the EU/UK trade relationship would be “modest”. That slap down is hardly consistent with her promises in regard to the Irish border, which still have to be converted into Treaty language.

The gap between popular expectations and practical possibilities remains dangerously wide.

The two year time limit to conclude the negotiation of the terms for UK withdrawal from the EU is, as we are slowly learning, far too short.

The implications of UK withdrawal have not, even yet, been fully discovered by the negotiators on either side. New complications and hypotheses are emerging every day. These arise because we are only now digging down into 40 years worth of trade deals, memberships, and understandings, which the UK can only be part of, so long as it is in the EU.

It would be in the interest of Ireland if the UK were to decides either not to leave the EU at all, or, failing that, decides to rejoin the EU, on terms acceptable to Ireland.

How might this happen? This is the question I am attempting to answer in a paper to be published today by the Institute of International and European Affairs.

The UK hopes to leave the EU on 29 March 2019 but to continue to have access to the EU market for a two year Transition Period, ending on 29 March 2021.This date was presumably chosen because it is before the scheduled date of the UK General Election.

I believe this Transition Period approach is a mistake. I believe it would be simpler and wiser for the UK and the EU to agree to extend the period for negotiation under Article 50 by two or more additional years. This can be done by unanimous agreement.


At the moment, the UK is seeking a two year transition period, after March 2019, during which, having left the EU as a member,  it would still enjoy the benefits of membership of the EU Single Market, and Customs Union. Some in the European Parliament have said the longest Transition the UK might be granted is 3 years.

If this is conceded, the U K, for the duration of the Transition, would not then have any say in the making, and in the interpretation of the rules of the Single Market and Customs Union, with which it would have to comply. It would still be subject to ECJ jurisdiction, and would still be contributing to the EU budget, on the same basis as if it was a member.

The UK Prime Minister calls this proposed transition period an” implementation” period.

Businesses in the UK and in the EU, and particularly Irish businesses trading with the UK, would presumably be expected to be implementing changes in their business practice to accommodate themselves to the sort of arrangements that would apply, in March 2021, when the UK had actually left both the Single Market and Customs Union, as Mrs May desires.

The difficulty will be that no one would know for sure what to prepare for.

The Transition would be more of a Postponement than a Transition!

This is because the  EU and the UK could only start substantive negotiations of the terms of a future UK/EU trade deal at the beginning of transition period, because the UK must first become a non member of the EU, before it can negotiate a trade deal with the EU.

On the other hand, as a non member and during the Transition Period, the UK would also have to negotiate replacements for the hundreds of  Trade and other Agreements it has with third countries as an EU member, which would cease once the UK had left the EU, on 29 March 2019.

Negotiating the terms of a Transition Period may prove to be very difficult, almost as difficult as negotiating a final agreement. Perhaps more, because there is no precedent to follow.

Of course, the political outlines of a  possible trade arrangement with the UK might have with the EU would be referred to in the “Framework for a future relationship” that, under Article 50, should accompany the Withdrawal Treaty.

The Withdrawal Treaty itself, and presumably the Framework, can be agreed by a qualified majority in the European Council.

But a future trade deal with the UK would face more difficulty. Depending on its content, and whenever it is eventually finalised, it  will  almost certainly require the  unanimous agreement.

If it covered services, many of which are regulated at national as well as EU level and which the UK wants included, it would have to get ratification from all the national parliaments.

So any outline of the trade deal, promised in the Framework accompanying the Withdrawal Treaty, might not survive the substantive negotiation that would take place after the UK had already left the EU

The Framework to be full of good intentions, but not full of the sort of bankable legal commitments that businesses will need to make investment decisions.

So two years may be too short a Transition period for business.

It will also be too short for trade negotiators, who say that a deal as complex, as the one the UK is seeking, would probably take 6 years to finalise, not just 2.

But, politically, a two year Transition, may be as long as the UK can live with, because its government is in such a political rush to leave.

By the time of the next election, the Conservative Party will not be comfortable ,if the UK is still in “transition”, implementing EU laws, contributing to the EU budget, and under the jurisdiction of the ECJ.  So it may be willing to pay a high price to finalise a Framework deal and end the Transition within the two years.

On the other hand, the likelihood is that, in those negotiating circumstances, the deal will be a “bad one” for the UK. But rejecting that “bad” deal will  not be attractive either because without a deal, the UK will be out of the EU, and will only be able to trade with the EU on “WTO terms”, which would be really bad for the UK, and appalling for Ireland.

All of this will be happening on the eve of the UK’s 2022 General Election.

In these circumstance the UK government might be tempted to look for an extension of the two years  Transiion and leave it to a post General election government to take the blame for an unsatisfactory Trade Agreement.

I believe one such time limited prolongation of the Transition Period, if requested by the UK, would be granted by the EU 27. But that would be it.

An indefinite prolongation, or a series of prolongations, would not be offered.

There is so much uncertainty surrounding the content and timeline of a UK/EU Trade deal that the Transition Period will not provide a reliable basis for planning by business.

All the same, the longer is the Transition, the better it will be for Irish business.

But a long Transition will be exceptionally difficult to sell in the UK.

It would offend against the principle of democratic representation. The UK would have to implement and abide by EU regulations, in the making of which it would have had no part. It would have no representation in the European Parliament,  Council or Commission. Any financial contribution it might make during the Transition would be represented by some as “taxation without representation”.

So, I conclude that, as the UK explores the difficulties of its proposed Transition or Implementation Period, it may find itself forced to look at other options.

The only other option on offer is an extension of time under Article 50 (3)


Article 50 (3) of the Treaties, under which UK withdrawal is being negotiated, says a country that has applied to withdraw from the EU and given notice of intention to do so under Article 50 (2) shall cease automatically to be a  member

“ two years after the notification referred to in paragraph (2), unless the European Council, in agreement with the member states concerned, unanimously decides to extend that period”.

Extending the two year period is a matter for the member states. There is no provision requiring the consent of the European Parliament to such an extension of the two years.

At the moment, there is no official sign that either the UK, or the EU 27, would contemplate using such an extension, or even talking about it.

It is too early. To do so would signal weakness, and would be a poor negotiating tactic.

But the provision for an extension of the two years was put there for a practical reason.

Even with the best will in the world, trade negotiations can take longer that all sides want.

There can be unexpected technical and legal difficulties.

General Elections and government formation delay can prevent decisions from being taken. Look at the example of Germany at the moment.

Rigid time limits can also be exploited by forces that have another agenda, and simply want to maximise chaos.

Politicians can even change their minds, but need more time, than is provided with in the two year limit, to adjust the expectations of their supporters.

Time limits create a fevered atmosphere in which rational calculation becomes more difficult.

Time will have to allowed, at the end of the  two year period, for ratification of the Withdrawal Agreement, and of the Framework for Future Relations by both the British and European Parliaments, and both may look for time for debate and deliberation on the merits of rejecting, or accepting, the proposed Treaty

. Neither Parliament may wish to be confronted with a proposition, which says “take it or leave it, and do so now”.

Allowing time for Parliamentary ratification , on its own, might necessitate an extension of the two years.

An extension of the two year period, under Article 50 (3) would be different, in its effect ,from an extension of the Transition period.

Under Article 50 (3), the UK would continue, for the duration of the extension, to be a full voting member of the EU, except on issues to do with Brexit.

It would still be a member of the ECJ and a British Judge would continue to sit there.

The UK member of the Commission would continue his important work in that capacity.

The UK MEPs would continue to sit in the European Parliament, although from 2019 there would be different MEPs from some of the constituencies.

The UK would continue to be bound by EU law, but that will also be case during a Transition. But in the Article 50(3) scenario, the UK would enjoy democratic representation.

In these senses, an extension under Article 50 (3) would be a better deal for the UK than a Transition Period.

But the Referendum decision to leave the EU would not yet have been implemented. It would still be under negotiation.

An extension of time under Article 50(3) offers a greater degree of certainty to business. The UK would definitely retain all the obligations and advantages of membership for the duration of the extension.

Article 50 (3) offers no guidance on, and does not limit, the period of an extension that could be granted. Nor does it place a limit on the number of extensions that might be granted.

Given that every EU state, and the UK itself, would have to agree, the likelihood is that the initial period of any extension could be quite short.

But if, during that extension, negotiations were going forward in a good and constructive spirit, further extensions could become possible

Under the Article 50 (3) approach, the UK would still be a member of the EU.

Thus, while it could agree a framework for its future relationship with the EU and this could cover trade matters, the UK could not negotiate and finalise a trade deal with the EU or anybody else.

That would be a big negative from the point of view of those in Britain who believe there are attractive trade deals waiting to be concluded.

But, on the other hand, the UK would continue to benefit from existing EU trade agreements, and the extra time would allow it to put much greater flesh  and detail into the Framework for Future Relations with the EU, than will be possible in the time between now and March 2019.

I believe the two year time limits has created a fevered atmosphere in the negotiations. It  has politicised them in a way that makes rational calculation of mutual interest more difficult.

An early agreement to a substantial extension under Article 50 (3) would remove this problem, and would give the negotiators more time and space.

I have the sense that some in the UK are open to this possibility, but there is little appetite for it in Brussels.

If the EU side were unilaterally to offer an extension of the time period, under Article 50 (3), that went beyond the time of the UK General Election, it would thereby place a heavier responsibility for a bad negotiating outcome on the current UK government.

The UK government might want to reject such an offer, but it might not be able to persuade the UK Parliament to agree.

This would not be easily done.

There is a feeling in some continental EU countries that the UK has already taken up too much of the EU’s time. For example, the David Cameron’s decision to prevent the Compact for the Fiscal governance of the Eurozone being incorporated in the EU Treaties, even though they had nothing to do with the UK, has left a very sour taste.

There is a fear that any extension of UK membership under Article 50 (3) could be exploited by the UK to block other EU reforms, and/or to improve the UK’s position in the competition between the EU and the UK post Brexit.

Granting the UK, which had decided to leave and chose the timing of its Article 50 letter freely, an extension of the time limit, would be seen by many as encouraging other sceptical EU states to use the threat of withdrawal as a bargaining tactic, or a means of getting votes in Elections.

In this context, taking a tough line with the UK is not seen as “punishment” of the UK, as much as being “self preservation” by the EU.

An extension of time under Article 50 (3) would mean that UK MEP’s would still be eligible to sit in the next European Parliament, at least until the extension period had expired and the UK was out.

A European Parliament Election in 2019 in the UK would allow the British people to debate the issue of UK withdrawal from the EU in a much more informed manner than was possible in the Referendum of 2016. The campaign, and the result, of the European Parliament in the UK in 2019 would give valuable guidance to negotiators.

It might confirm the decision to leave, or it might signal a willingness to change course.

Either way, under the Article 50(3) time extension scenario, this would happen before the UK had actually left the EU. So the outcome of a European Parliament Election, in the UK in 2019, would be politically meaningful.

If the result was decisive vote in favour of Remain candidates, the UK might have the option of withdrawing its Article 50 letter and staying on in the EU, under existing terms.

An extension of time under Article 50 (3) would facilitate a second Referendum, if that is what the British people want.

The choice would be much clearer than it was in 2016, because Britain would still be in the EU at the time of the Referendum. So staying in the EU in existing terms would be the clear alternative to accepting the Withdrawal Treaty and accompanying Framework document that would be presented in the Referendum.

Reapplying to join under Article 49, which would be the only option if the change of heart took place after the UK had already left the EU would be much more difficult. It would mean a whole new negotiation and different, and less favourable terms of membership, for the UK.

On the negative side, UK MEPs continuing in the European Parliament after the 2019 Election could play the role of spoilers. They could ally themselves with nationalistic and anti system MEPs from other countries, who simply do not want the EU to succeed.

A disadvantage of a time extension under Article 50 (3) is that it would interfere with the plans of a number of European leaders, including the Taoiseach and President Macron, to allocate some of the seats to be vacated by UK MEPs, to MEPs who would be elected from a constituency of the entire European Union. In the European Parliament itself, work is already being done on the allocation of the vacated UK seats, and some existing member states could get more seats. Beneficiaries might be inclined to resist an extension of time under Article 50 (3), but the European Parliament’s consent is not required. But keeping the UK in the EU is more important.


If an individual wants to withdraw from a contract, he can do so, but he would normally expect to have to compensate other parties to the contract for the damage his decision might cause. No consideration at all was given, during the referendum in 2016, to the impact, UK withdrawal would have on other contracting parties, notably on Ireland.

For all these reasons, I believe the UK, and the EU 27, need to take time out to think about where we are going with Brexit. Two years is not enough.

The confrontational atmosphere, engendered by the artificial time limits in Article 50, prevents a quiet discernment of mutual interests. It imposes a dangerous straight jacket.

As I have shown there are advantages but also profound difficulties, with all the options I have considered.

But, on balance, I believe the best way to reach a sensible outcome in the negotiation, that will do least damage to the political and economic relations between the UK and the rest of Europe, would be to forget about the Transition option, and agree a time extension under Article 50 (3).

That may not seem politically feasible at this stage, but I believe it will be seen in a different light by next October.

As I said earlier, if the EU side were to offer such an extension, at a moment when the full difficulty of the Transition option was becoming clear, it would change the dynamic in British politics.

If it rejected the time extension option in favour of the Transition option, the UK government itself would have to take the full responsibility

  • for entering what some Brexiteers have described as “Vassal status”,
  • for implementing rules they had  no say in making, and
  • for entering a period in which the UK would paying into EU funds, with no say in how the money was spent.

The rush for an early Brexit, that motivated Mrs May to write her Article 50 letter before her government had done its homework, was driven by a deep fear among the architects of Brexit that, if they did not leave quickly, they, or their voters, might change their mind about leaving at all.

This is, quite literally, an irrational basis for deciding the future of Britain.

It is a deeply dangerous basis on which Britain would impose the costs of its mistakes on Ireland.

It will leave deep and lasting scars.

I believe that an extension of time under Article 50 (3) of the Treaty is the best way to minimise, and possibly to eliminate, the damage.


Speech by John Bruton, former Taoiseach and former EU Ambassador to the United States, speaking at the Skoda  Fleet Business event at 8 am on Monday 29th January in Bellinter House Hotel, Navan Co Meath;


The EU vote ignored Ireland, but the UK can still change its mind

Let me first try to explain why the handling of Brexit by the UK led to a crisis in Anglo-Irish relations. Treaties between nations are like contracts between individuals. They influence how each party behaves, towards one another and towards the rest of the world. While a contract or a treaty can be withdrawn from, there is a legitimate expectation that this will only be done with careful advance consideration of how this will affect the other parties to the treaty or contract. This is not just a legal expectation, but an expectation of the sort of civility that should apply in relations between people and nations.

One also takes for granted that, if the withdrawing party to a contract wants a new or different contract with the same parties, it will say in advance what it wants that new relationship to be. Even now, Ireland has no clear idea what sort of relationship, compatible with the EU rules the UK helped make, the UK wants with the EU, and hence with Ireland. As the country most affected by Brexit, there is thus deep disappointment in Ireland that our neighbour the UK has not been able, in respect of Brexit, to live up to the normal expectations I have just outlined.

Forty-four years ago, Ireland and the UK signed the same contract with one another, and with the seven other countries that then made up the European Common Market. We each renewed that contract several times, in the UK’s case with the sovereign approval of its parliament. We each expected that the others would continue to honour the contract and we shaped our institutions and our economies on that basis. In particular, when Ireland and the United Kingdom negotiated the Belfast and St Andrews Agreements, to resolve the ongoing conflicts in and around Northern Ireland, we each did so on the unquestioned assumption that the UK would continue to be an EU member.

We each assumed that the freedoms created by membership of the EU could continue to be used to strengthen relations between the two communities in Northern Ireland, between North and South, and between Ireland and Britain.

The renegotiation and referendum process that was initiated by David Cameron, which has led to Brexit, seemed to us in Ireland to have been designed in a way that took no account of the obligations and expectations the UK had created in Belfast and at St Andrews.

During the renegotiation phase, the Irish taoiseach, Enda Kenny, supported Cameron’s attempt to improve the special status the UK already had in the EU, even though some of the concessions the UK were given weren’t in Ireland’s interest.

Irish people saw other problems with the process that led to Brexit. The complex UK/EU relationship was reduced to a simple “Leave” or “Remain” choice. While it was clear what “Remain” meant, no effort at all was made by the government sponsoring the referendum to say what sort of “Leave” it would choose. So “Leave” became a vehicle for fantasies and wishful thinking of the most egregious kind. Explanations of the choices between different forms of Brexit – such as on whether to stay in the customs union and the single market – were left over until the people had already voted.

There was no deliberative process to inform public opinion, something one would have expected of the UK parliament, one of the oldest democratic deliberative bodies in the world. The referendum was not preceded by detailed green and white papers. In the absence of authoritative information, there was no informed debate about the impact of Brexit on the Irish border, and on hundreds of issues.

It is only in the past week that the UK government has started to consider the sort of post-Brexit relationship it will ask for. In doing so, it will have to take account of the fact that the EU works because it is a single legal order, with a single system that makes, implements and adjudicates on the meaning of shared EU rules. The UK has a sovereign right to decide what it would like, but it cannot expect the EU to change its very nature, just to accommodate a country that is leaving.

In preparing its proposal, the UK will need to take into account the Interlaken principles that govern EU relations with third countries, and the EU community customs code, both of which UK ministers helped to draft. When it has done this, the UK government can then compare the special position it already enjoys as a voting EU member, with what the EU will be in a position to offer it as a non-member. Then it can make an informed decision. We are each allowed to change our minds in our private lives if the issue is important enough. Nations might sometimes allow themselves the same privilege.

Opinion @ The Guardian by John Bruton

Eurofound Forum


It is an honour to be invited to address the topic of convergence at this major event The goal of European convergence will not be achieved by experts or elites.

It will require the whole hearted support of the broad mass of the peoples of the European Union. In what say tonight, I will try to tackle that.

The Minister for Foreign Affairs has outlined to you today Ireland’s approach to the Brexit negotiations. I support all he said.

Tonight I would like to move beyond Brexit.


I would like to talk about what the European Union might look like in 2025, the date by which I expect the UK will finally have settled on its relationship, as a non member, with the EU.

I do not, of course, exclude the possibility that the UK will change its mind about leaving, but the two year time limit of Article 50 has, unintentionally, created a hot house atmosphere in which a re examination of proclaimed positions is almost impossible, politically.

I have advocated that the 2 year period in Article 50 should be extended to 6, but, for the purposes of this presentation tonight, I will assume that we stick with the 2 years and that the UK will be out in March 2019, and have finally agreed a permanent relationship with the EU by March 2025.

Ireland will remain a full member of the EU, notwithstanding the fact that a large non member country will, from 2019 on, constitute a large geographic, cultural and political barrier between Ireland and the rest of the EU. This geographic difficulty can, and will, be overcome but it will require extra commitment here in Ireland, and in the rest of the Union.


For the service sectors of our economy, this geographic barrier will be manageable, but it will be much less so or the goods sector, particularly for food, where UK and EU tariffs and standards may diverge. Assurances on the permanent arrangements this point from the UK will be a key point for Ireland in any framework for a future relationship that might be agreed with the UK.

The potential cultural gap between Ireland and the rest of the EU is of equal long term significance. Irish people consume their news through English, and what we see that the English language media about the EU  is dominated by suspicious, and often under informed, Anglo Saxon notions about Europe, which go back hundreds of years. Yes, many Irish people do read French, German and Italian papers too, but they are in a minority.

In this context of avoiding cultural isolation, there are  two  of the aspects of President Macron’s excellent Sorbonne speech, which I especially welcome.

One was his setting a goal that all students should speak two EU languages by 2025.

The second one was and all EU 25 year olds should, by 2015, have been assisted to spend six months working in another EU country. This could be described as an “Erasmus for All”.

In practice, in the Irish case as far as language is concerned, that means being able to speak English and a continental European language as well.

If President Macron’s suggestion is taken up by the EU, each EU country should be benchmarked between now and 2025 on how far it is from the 2025 goal and EU funds allocated on a results basis.

As the European Parliament starts work on the next seven year budgetary perspective, it should allocate substantial funds to these goals and to the broader cultural unification of the European Union. We need to build a strong European Union sense of identity among people to go alongside their already strong national and regional identities.

The Erasmus for all idea is particularly important. Ultimately, in building the European Union, we are aiming to build a sense of shared identity among the peoples of this vast continent.

Among the minority of university students who have benefitted from Erasmus, I believe that has been a great success. But these students are part of an elite, and many are drawn from socio economic groups that that are pro EU anyway.

Extending the opportunity of Erasmus across the entire under 25 population would widen horizons for young people, and create a sense that the EU does good for everybody, and not just for the upwardly and outwardly mobile section of the community.

I hope the fact that educational policy is a primary function of the member states ( and in some cases of regions) will not be allowed to be an obstacle to action by the EU on these two activities, from which Ireland could gain,  and from which Ireland  needs more than most, because of the separation from the EU that Brexit will otherwise create.


It is said that Brexit will also create something of a political barrier between Ireland and the rest of the EU.

The absence of the UK at the table will create some difficulties on some regulatory issues, but even in my time in government, I felt that UK Ministers were beginning to disengage psychologically from the common EU goals, and to adopt a purely transactional, issue by issue, approach.  If everybody had done  that the EU would not last long.

The isolation of Irish public opinion from some of the thinking and ideas on the future of Europe in other countries is relevant.  It is natural that different countries want different thing from the EU, and their needs will change over time.  How much thought do Germans give to Greek public opinion about the EU, or vice versa? What Estonia expects of the EU will differ from what France expects.

If the EU is to work, voters in each country need to begin to understand, and take into account, the public opinion in other EU countries, and not just in their own.

We cannot just leave the job of building that better understanding to Ministers and diplomats alone.

One way of making the public opinions of all 27 member states aware of the public opinions in the other 26 states would be to have a genuine European Election for some of the seats in the European Parliament. This could be done by allocating the seats, soon to be vacated by UK MEPs, to a single constituency to elected on an EU wide basis. These seats could be filled from lists led by prominent figures who would have to campaign in all 27 EU states, and whose electoral programmes would have to be informed by the thinking in all of them too. It would harness democratic competition to build a shared understanding across national boundaries.


In his speech, President Macron laid great stress on the security threats facing Europe, from terrorism of which France has had more than its share, and from the inevitable, if gradual, disengagement of the United States from European military security. He also raised the threat to EU security from civil wars in our neighbourhood and the resultant refugee flows.

As an island of an offshore island, Ireland has been able to take more relaxed view on some of these matters.

But there are fewer and fewer threats nowadays, from which the sea is a sufficient protection.

Cyber attacks can be used to disable critical infrastructure, to alter medical records, to spy on personell files  and thus to create opportunities for blackmail.

As a highly internationalised high tech and  service economy, Ireland is vulnerable to these threats, especially now that so much of our energy supply will come to us through a non EU member state.

Ireland should work to through the EU and Partnership for Peace to strengthen its cyber defences. President Macron envisaged a European Intelligence Academy, which is also something from which smaller EU states could benefit.


This conference is concerned with working and living conditions. These will come under increasing stress as our population ages, and as proportionately fewer people of working age find themselves  having to pay for the health and pension entitlements of a ever increasing retired population.

Germany, the dynamo of the EU economy at the moment, will be hit by this problem sooner than most of us. The median age in Germany is 47, whereas the median age in the US is 38, and that affects relative dynamism. Like Italy it is getting older faster, and this is not fully taken into account by some commentators when they look to Germany to loosen its purse strings  for the good of Europe.

President Macron suggested a European Labour Office to help achieve fair and equal pay for the same work. I expect your discussions here today will have made suggestions as to what this office might do.

He also recognised the competitiveness challenge that the EU economy faces.


Competitiveness is enhanced by investment, more so even than it is by wage restraint. In the past ten years in Europe, we have had wage restraint, but not enough investment.

One area of investment for the EU is the electricity grid. If renewable energy is to replace fossil fuels, we will have to greatly enhance our electricity grid across the EU quickly, and in a cost effective way. Ireland has something to learn here.

We will also need to ensure that the EU is in pole position in R and D. That is not the case now. Rand D spending is 2% of GDP in Europe as against 2.8% in the US and 3.5% in Japan.

The spin off from R and D is best if it takes place in clusters. These clusters are usually around big cities, where people can move from job to job, without moving house. And Europe has no technological clusters of this kind, whereas the US had two or three.

President Macron suggested the following, and I quote

“  I want Europe to take a leading role in this revolution through radical innovation.  I propose that, over the next two years, we create a European agency for disruptive innovation in the same vein as the Defense Advanced Research Projects Agency (DARPA) in the United States during the conquest of space.  This must be our ambition.  Today, we have a unique window to do it.  We must drive this ambition, finance research in new areas such as artificial intelligence, and accept risks.  Such an agency would make Europe an innovator and not a follower.”

Objections will be raised to this.

Is a European Agency the best body to pick winning technologies? Will it become prey to national rivalries within Europe? Will firms that have non EU parents, of which there are many here, be eligible to participate?

But the idea is forward looking and its adoption would suggest that Europe is awake to the challenges of the modern world.


Another theme at the conference here today is the growth in income inequality across the world, not just in the west, but also in Socialist China. This divergence has been most rapid since 1988

The European Parliament’s Global Trends Report 2035 puts it this way

“Economic inequality has grown in the United States and Europe for most of the last thirty years in real terms and in political salience. The gap between the rich and poor was described as a “very big problem” by a majority of respondents in France, Italy, Spain, and Greece in a 2014 Pew survey.”

They measured this by comparing the share of income earned by the top 1% with the rest of society. From 1949 to the mid 1980’s that share actually fell slightly, but, since 1988, the gap has widened.

Of the countries surveyed the growth in inequality has been fastest in the United States and the UK, but significantly less in France , Netherlands and Sweden. I believe Ireland would be somewhere in between.

The factors causing increased inequality are identified, by IMF researchers ,as

  •  technological change,
  •  globalisation,
  •  less union protection and
  •  tax policies.

Their view is that this problem will not solve itself over time. In fact it could get worse. New technologies, like artificial intelligence and driverless cars, will hit lower income jobs first.

A big challenge will be designing a combination of tax and social security measures that mitigate inequality without leading to the flight of capital and talent from the countries that take a lead in this field. I do not see the EU taking a prescriptive lead in this matter, but I do believe it should disseminate best practice.

It should also use its competition and state aid policies to ensure that the tax base is as wide as possible. The wider the tax base the lower can be the tax rate.


I would like now to say a word about how the EU sets is policies.

Increasingly the agenda of the EU is being set by the 28 or 27 elected Heads of State and Government (HOSG), rather than by the European Commission, as might have been envisaged with the Monnet method.

This is because HOSGs face their electorates in way that Commissioners do not, and because much of the EU’s work combines EU and national action.

But there is a disadvantage, in that HOSG’s are part time Europeans. They have heavy domestic agendas. With 28 of them around the table, it must also be very difficult to brainstorm and avoid the tyranny of a pre set agenda.

Commendably, the Council President Tusk has set out a detailed rolling agenda for all the meetings right up to June 2019.

That gives civil servants time to prepare, but does it allow Leaders enough time to think?

Thankfully President Tusk has also increased the frequency of meetings, and that will give HOSGs more time to think together about the longer term issues.


Finally I will say a word about the euro. A lot has been done to underpin it. But private and public debt levels are still considerably higher than they were before the 2008 crisis.

I do not believe the EU needs an ongoing transfer union to underpin the EU. Transfers are already reaching 4% of GDP in some recipient countries.

But a facility is needed to help euro member countries that are hit by an asymmetric shock (a big migration surge, a technological shock, or even Brexit).

Some form of temporary top up from EU funds for Unemployment Relief might help.

A Limited form of European Bank Deposit Insurance would be good. It should be combined with a restriction of banks buying too many of their own countries bonds and thereby creating the risk of banks dragging down their own governments if they get into difficulty.

It is much better to allow the markets to discipline governments that borrow unwisely through interest rate differences than it would to try to achieve the same goal by threatening fines after the country that is already in trouble.


I thanks Eurofound for the contribution it has made to the EU since 1978 .

I pay tribute to our late President Paddy Hillery, whose initiative Eurofound was when he was Commissioner for Social Affairs.

I hope the deliberations today will help make a big success of the Social Summit of the EU in Gothenburg next week

Speech by John Bruton, former Taoiseach and former EU Ambassador to the United States,  at the Gala Dinner  of the Eurofound Forum in the State Rooms, George’s Hall, Dublin Castle at 7.30pm on Tuesday 12 November



In his book “Fateful Choices”, which describes how country after country tumbled into what became the Second World War, the British historian, Ian Kershaw wrote

“The fateful choices that were made were not predetermined or axiomatic. But they did reflect the sort of political system that produced them.”.

A Global War was not anyone’s preferred option, but a combination of ideology, a fear of being encircled or pre empted, and miscalculation of the intentions or reactions of others, gave the world the most destructive war in human history.

Similar blind forces are in play in the Brexit negotiation.

The current UK political system, and the anxieties and obsessions it has generated, determine the UK position on Brexit.

This expresses itself in an artificially inflexible, and brittle, interpretation of the meaning of the 2016 Referendum result.  

The UK Government has so far been unable to convert that into a detailed, legally viable, and constructive, outline of its desired future relationship with the EU.

If it got into detail, the disagreement between Cabinet members is so deep that the Conservative Party would split and the Government would fall. The Labour opposition has a similar problem.

It suits both of them that the EU side in the negotiation is insisting that substantial progress must be made on other issues, before negotiations about the future relations between the EU and the UK begin, because if the UK Government had to set out a detailed position on the future relationship, it is liable to split. UK party and public opinion has been polarised and is unready for compromise. The Conservative Party is consumed with its leadership struggle and cannot be relied upon to make a deal that will stick. The Foreign Secretary’s four ”red lines” make compromise impossible.

Likewise the EU political system determines the EU’s approach. There is quite understandable annoyance that the UK, for whom so many special deals were made in the past, now wants to leave the Union it freely joined over 40 years ago. The EU negotiating position is necessarily inflexible because it has to be determined by 27 countries. It can only be changed by consensus among them, and that can only be arrived at very slowly.

Yet the time limit set in Article 50 of the EU Treaty is very short. It will require immense speed of negotiation, on a vast range of difficult questions, not only between the EU and the UK, but also potentially with the World Trade Organisation and perhaps with EFTA, which the UK would have to join if it wants to be in the European Economic Area, like Norway. All this will have to be done between January and November of 2018.

Both sides in this negotiation should ask themselves this question……Are they at risk of finding themselves on rigid tramlines, heading straight for a cliff, and if so, should some rail sidings be put in place, into which the two trains might pull, for a moment of reflection, before they go over the edge in March 2019?

A  former Judge in the European Court of Justice, Franklin Dehousse recently  argued that separating  trade issues from those concerning the  Irish border  artificially disconnected connected topics, and thus  limited the possibility of constructive tradeoffs.  

But he also insisted that the UK must first come up with “precise proposals on all withdrawal matters”.  

He is right. There is no point in the UK asking for the EU to move on to trade matters,  unless and until the UK itself is capable of spelling  out in substantial detail  what it wants, and says exactly what  trade, environmental, and consumer safety policies it will follow post Brexit. It is because the UK is unable even to say what it wants, in the long term, on these issues, that there has been no progress on discussing Irish border issues.

Meanwhile  the UK Trade Policy Observatory (UKTPO), in an article by Professors Alan Winters, Peter Holmes and Erika Szyscak, has suggested that Theresa May’s idea of a “transition” or “implementation” period of two years, after the UK had left the EU, might be very difficult to implement. If so, the UK will crash out of the EU in March 2019.

They saw several problems with Theresa May’s transition idea. They are not trivial issues..

One was that, when the UK leaves the EU in March 2019, it will also be automatically out of the EU Customs Union too. Therefore they claimed it would have to negotiate a new temporary Customs Union with the EU, for the transition period. It would have to notify the WTO of this new temporary Customs Union, which could potentially lead to protracted negotiations with WTO partners.

The UK and EU would also have to agree on how all EU Regulations and Directives would apply in the UK during the transition period, with complete certainty on how mutual recognition of testing and certification,  and the free mobility of labour, would work.

According to the UKTPO authors, the status of such an agreement under EU law would not be certain, but because it would cover issues on which EU member states retain competence. This might mean that the transition agreement itself might require ratification by all EU member states too. That would take time, and meanwhile the UK and its EU trade partners would be in limbo. The UK might be already out of the EU,  while its transition deal had not yet been ratified and was inoperable.

Given the delays ratifying the EU/Canada deal, which got bogged down in the politics of the French speaking part of Belgium, this is a daunting prospect.

Imagine going through all that for deal that might only last two years, and then going through the same process ALL OVER AGAIN for the final deal!  

So negotiating and ratifying a transition deal could be almost as difficult as negotiating the final permanent deal!

The UK needs to engage itself seriously with the complexities of Brexit.  If it looks at all these complexities thoroughly, sense is that it may then conclude that, despite Boris Johnson’s anxiety to leave quickly, the time limits are far too severe and that more time is needed.

If the UK was wise, it would ask its EU partners to extend the negotiation time from two years, to (say) six years.  That extension of the negotiating period could be done by unanimous agreement among the 27 EU states and Britain.

With a longer negotiation period, the UK would need no transition deal and would remain a member of the EU, until the final exit deal was done. There would be only one deal to negotiate and ratify, the final deal.

There are really no good options here.

.It would be politically difficult for any UK government to ask for an extension of the negotiation time. “Leave” supporters would suspect betrayal.  There would be very deep reluctance on the EU side to grant such a request.. Some EU states would feel that extending the period was being far too easy on the UK, and that the UK needed a reality check.  Others would argue prolongation of the exit negotiation might destabilise other EU members, and distract the EU from other urgent work.

These are valid objections, but they are arguably less damaging than the real likelihood that the UK will crash out of the EU without any deal.

Lengthening the period to six years would, however, allow the UK electorate to consider, in a more informed way, the full implications of the course they are following.

The present tight time frame minimises the opportunity for creative thought.

Instead, it maximises the influence of blind bureaucratic and political forces.

It increases the likelihood of miscalculation, and of the UK leaving the EU with no deal at all. That would be very bad for Ireland, or for the EU as a whole.

 I hope more negotiating time can be agreed.  If not, the tempo of the negotiation must be immediately and dramatically increased.

Unfortunately, there is little sign that the current UK government, the originator of Brexit, sees this.

U.K. Needs to Decide EU Relationship


President Juncker made a good speech to the European Parliament last week.

He stressed what he called European values.

He singled out three….the Rule of Law, Equality, and the Freedom to Voice your opinion as a citizen or a journalist.

The stress on the rule of law is important in light of what is happening in Poland. The EU is facing a long and difficult confrontation with Poland and the Polish government will whip up nationalist sentiment. But the EU must not back down.

In this context, he also stressed how important it is that the rulings of the ECJ are accepted as final, and implemented, by all member states. Without this, the EU would wither away. This being called in to question in Poland and Hungary in respect of accepting refugees.

On Equality, he stressed that there should be equal pay for equal work in the same countries. This is a concern of the French President.

I am glad that freedom of speech was stressed.

Freedom of speech is important if we are not to see democracy turned into the tyranny of the majority.

Prevailing opinions must be open to challenge, and sometimes that may give offence or be misconstrued.

Those who are offended have the right of reply, and if someone is libelled they can go to court. Apologies for mistakes in the use of free speech should, in general, be accepted.

Journalists should not be forced out of their jobs, to serve the commercial interests of advertisers, who have come under pressure from social media. That is happening in Ireland at the moment can be just as much a threat to free speech today, as state censorship was in the past.

I am glad that President Juncker mentioned a European Deposit insurance scheme to help make banks safe, but there should also be a limit placed on banks buying too many bonds of their own government, which can lead to dangerous concentration of risks.

He stressed the strengthening of Europe’s defences against cyber attacks. Apparently, 4000 ransomware attacks are made every day in the EU.

He also stressed the need for better defence against state inspired and organised cyber attacks, of the kind suffered by Ukraine and Estonia. Ireland should play its part, through the EU and the NATO Partnership for peace, of which it is a member, in working to strengthen Europe’s cyber defences. In the cyber world, the fact that Ireland is an island is no defence, and will be even less so when the UK leaves the EU.

I agree with his support for having some MEPs elected on a EU wide list. That would be a small step , through the debate it would engender, towards creating a Europe wide informed public opinion

As I pointed out in a recent speech in Cahirciveen, there are huge differences between EU states voters in their views on what the EU should prioritise, and little understanding of other countries needs and fears. An election campaign in which every voter would choose between different European parties, on the basis of their programmes, would help build a sense of ownership of the EU by all the voters of Europe, and a better understanding of what the EU is, and is not, capable of doing.

But I am not keen on his idea of merging the roles of President of the European Council, and that of President of the Commission.

The Commission is the guardian of the Treaties, whose provisions it must uphold without fear or political bias.

The Council is a political body, which, with the Parliament, must make political judgements on Commission proposals. That separation should not be changed.

Some division of powers is appropriate to a confederal Union, like the EU. The EU is not a state and is not going to become one. The fact that the UK can leave it proves that the EU is a voluntary union, unlike the USA.

I was surprised to hear him propose to move policy making on tax matters to majority voting. This would mean that big countries could set the tax policies of small countries, which is not acceptable. It would alter the balance of the EU fundamentally.

On the face of it, this would seem to require an amendment of the EU Treaties.

President Juncker seemed to suggest that majority voting on tax policy could be achieved by using a “passarelle” provision in the Lisbon Treaty, which allows some issues, currently decided by unanimity, to be moved to majority voting, by the unanimous agreement of all EU Heads of Government(without actually amending the Treaties).

I am satisfied that this unanimous agreement will not be forthcoming and that the proposal to move tax policy to QMV will not go far. In light of the 1986 Crotty judgement on the constitutionality of the  Single European Act, it is likely that demands would be made for a referendum in Ireland on a move to majority voting on tax policy.

The European Council gave the following assurance about the interpretation of the effect of the Lisbon Treaty to the Irish people in June 2009;


Nothing in the Treaty of Lisbon makes any change of any kind, for any Member State, to the extent or operation of the competence of the European Union in relation to taxation.  “

The Commission would be prudent to take special note of this in pursuing this aspect of President Juncker’s agenda






New Fault lines in Europe…..the political consequences of Brexit

If one reviews European history over the period since the Reformation five hundred years ago, the role that England has sought to play in Europe has been that of holding the balance between contending powers. It used its naval strength, and the overseas colonies  its naval strength allowed it to hold, to exercise that balancing European role.

At no time in the last 500 years, did the UK seem to disengage from, or turn its back upon, continental Europe. Indeed England felt it so much a part of continental Europe that Henry V111 actually contemplated  being a candidate for Holy Roman Emperor.

Rather England sought to be sufficiently involved in Europe to exercise its balancing role effectively, but without being so intimately enmeshed in continental issues, that it lost its freedom of action. England’s extension of its power to Ireland and Scotland were contributions to its goal of defence against, and influence over, continental Europe.

That same motivation lay behind the decisions the UK took to go to war in August 1914 and September 1939… that of maintaining a balance in Europe

The position that the UK held in the EU on 22 June 2016, the day before the Referendum, could be said to have been a perfect expression of that traditional English approach. The UK was having its European cake, and eating it at the same time.

The UK was a full voting member of the EU, but was exempted from aspects of EU policies that it might have found too entangling, like the euro, the Schengen passport free zone, Justice and Home Affairs cooperation and the Social Chapter of the EU Treaties.

But as a full voting member, the UK could still influence the direction of the EU, and, if necessary, slow down developments it did not like,  such as a major role for the EU in defence, where the UK preferred the job to done by NATO.

The UK’s budget contribution had been modified through a rebate, and agricultural policy had been modified in a direction sought by the UK.

The UK, it could be said, had the best of both worlds the day before the Referendum.

It was sufficiently IN, to exercise influence on the EU, but sufficiently OUT of it, to maintain the sort of freedom of action that befitted its historic role.


Ireland’s position is very different from that of the UK.

It has different, but not incompatible, priorities. They explain why Ireland is determined to remain in a strengthened European Union.

Like most of the smaller and medium sized powers in Europe, Ireland does not have the military or economic strength to exercise the sort of freedom of action that a bigger power, like the UK, France or Germany, could exercise. Whereas bigger countries might find European rules to be, at times, a slightly inconvenient restraint, a smaller country finds these common rules a source of protection, security, and freedom.

For a smaller country, the common rules guarantee it against unfair competition by an overweening bigger neighbour. They make the markets in which it competes predictable, open, and free of arbitrary behaviour. The common rules that the EU makes, and enforces, enable a  country like Ireland to compete on equal terms for international investment, something that would not be the case if bigger countries were unconstrained by  a rule based system.

Even in fields in which it might not be directly involved, like defence, a smaller country, like Ireland, benefits from the fact that bigger countries cooperate, through common organisations, like NATO and the EU, to preserve and defend a peaceful, and secure, space in its vicinity. Without peace in Western Europe in the preceding fifty years, there would have been no Celtic Tiger in the 1990s!

Now that the people of the UK have decided, in a Referendum, to quit the European Union, much is changed.


The UK government has decided to go further than the requirements of the referendum decision of 23 June 2016, and to leave the Customs Union, and the European Economic Area as well, and to reject any jurisdiction of the European Court of Justice, adds to the difficulties.

It changes the context in which common threats must be faced, by both the UK and Ireland. Brexit may be an exclusively British initiative, for which Britain is wholly responsible, but its effects will be felt by others.

This is most topically illustrated by the question of information sharing on terrorism between the 28 EU states, including the UK.

This sharing is done under the Schengen Information System, which the UK can access as an EU member, and where disputes about what can be shared can adjudicated objectively  under the aegis of the European Court of Justice.

As a non EU member , the UK will  have to negotiate a special deal  to get access to this information. Access may not be automatic, particularly if the UK continues to reject ECJ jurisdiction on disputes about  what may, and may not, be shared, and how.

Now that the UK General Election has failed to endorse the Prime Ministers vision of a hard Brexit, the parties who will be forming or supporting a new government here have the opportunity to reopen some of the question like the Customs Union and acceptance of ECJ jurisdiction in certain areas. I hope that these are thoroughly looked at again, in an open minded way in the inter party negotiations and the options properly debated. That debate did not take place in the General Election campaign at all.


The example of EU cooperation against terrorism illustrates the fact that EU has provided the UK, and its fellow EU member states,  with a common system for

  • making,
  • amending,
  • enforcing and
  • interpreting

common rules on matters as diverse as food safety, aviation, intellectual property protection, and consumer protection in the purchase of financial products.

The fact that the rules are now common to all, means that food can be sold, airline competition facilitated, patents respected and savings protected across the whole 28 countries of the EU.

The fact that the rules can be amended in a single legislative process for all members saves a lot of time.

So does the fact that they will, if necessary, be enforced effectively and uniformly across Europe, under the supervision of the European Commission.

The fact that these common rules will be interpreted, in a uniform way across the whole of Europe, under the aegis of the ECJ, also avoids all sorts of confusion, haggling and duplication.

Without the EU, none of this would be the case.

It is really important for a business that seeks to sell goods across Europe to know that the  standards the goods must comply with will be the same everywhere and that these rules will be enforced and interpreted in a consistent  way in every EU country.

Outside the EU, to open EU markets to its exports, the UK will now have  to negotiate a new deal on each topic, then agree a separate procedure for  future amendments to  that deal, and agree procedures  for enforcing and interpreting the deal.

This is what the Swiss, with their 120 different Treaties with EU, enjoy. A lot of work!

It is possible to envisage, with a huge one off effort of political will on both sides, the completion and ratification of an initial Trade and Services agreement between the UK and the EU sometime in the next five years.

An equally daunting task will come afterwards, when one has to update, interpret, and ensure adequate enforcement of, the initial agreement. The opportunities for gamesmanship by commercial and political interests, for opportunistic blocking minorities, and for sheer bloody mindedness are easy to imagine.

Everything will be up for grabs each time. Bureaucracies will have never ending occasions to justify their separate existence.

But that is the path the UK has chosen.


It will, I regret to say, involve the diversion of top level official talent, in 28 capital cities, away from anticipating the challenges of future, and instead towards reopening agreements made over the past 44 years.

Our most talented civil servants will be taken up with digging up the past, rather building the future. It is a tragedy.

The Brexit process will not be like a member leaving a club of which he or she no longer wishes to be a member, which is an easy enough process, once the bar bill has been settled.

It will be much more like a divorce between a couple, who have lived together for years, have several small dependent children, a mortgage, and a small business they had been running together. Not only have past bills to be settled, but future liabilities have to be anticipated, decisions made about the running of the business, and rights and responsibilities in respect of the children, agreed.

It would be naive to think that the divorce between the UK, and the other EU countries, including Ireland, will not leave scars. I hope that is all they will be, scars, that will gradually become less visible.

The financial terms of Brexit will be important, as they are in any divorce. They will encompass the future as well as the past. One should remember that Switzerland and Norway contribute to funds to help poorer EU countries to whose markets they have access through arrangements with the EU. It is unlikely to be different for the UK, but if we are to have a constructive negotiation on financial contributions, we also need to have a constructive discussion of the terms of UK access to the EU market.

As the initiator of Brexit, the UK has the primary responsibility to make it work for both sides.

Negotiators on both sides should remember the wise words of an Assistant US Secretary of State in 1945;

“Nations which are enemies in the marketplace, cannot long remain friends at the council table”.

Bitterness in trade negotiation can poison other forms of cooperation. The initiators of Brexit in this country may not have given much thought to that, but those who will negotiate it now,  have a duty to think about it.


Everyone must work to ensure that no open wounds remain at the end of the negotiation. I am sure that, as a full, loyal and active member of the EU, Ireland will work tirelessly to minimize misunderstandings, to interpret UK concerns for our EU colleagues, and vice versa. As the only English speaking member of the EU, I expect Ireland will at times also have a role in interpreting the United States for our European Union colleagues .

The best way of avoiding leaving open wounds when the negotiation is finished, is through timely anticipation of the things that could go wrong.

I hope that some of the things I say this evening will help in that regard.


Starting closest to home, we will have to reach agreements on the highly emotional and symbolic issue of fisheries. Fish do not respect territorial waters. While fishing boats can, in theory, be restricted to territorial waters, fish cannot. Overfishing in one jurisdiction affects the livelihood of fishermen in another. Conservation is vital. Who will adjudicate on this, ten years from now? Will there be quotas? Who will allocate them? In the absence of agreement, one can easily envisage clashes, even physical clashes, in seas around us.


Also close to home, there is the issue of Northern Ireland. Originally, when the UK and Ireland joined the EU in 1973, Northern Ireland was the subject of a de jure, if not de facto, territorial dispute between the two countries. As a result of the improved relationship between the two countries that flowed from their common membership of The EU, and as a result of a great deal of creative thought and mutual concession, that issue has been resolved.

Now Brexit has intervened.

The two big parties in Northern Ireland have taken opposite sides on Brexit.

They have revived the issue of territorial sovereignty.

Both these parties seems to be more comfortable agitating about their irreconcilable demands on territorial sovereignty, than engaging in  the day to day drudgery of Ministerial responsibility in a power sharing Administration,  in a time of limited budgets. It is time for Ministers in Stormont to go back to work.

In the past, Prime Ministers and retired statespersons could fly in to Belfast,  to provide cover for a new compromise between the parties that allowed them to get back to work.

As Brexit will absorb so much of everyone’s time in coming years, the scope for this sort of high profile counselling will be less.  Reality therapy may be needed.

The scale of border controls in Ireland, and at ports on either side of the Irish Sea, and of the English Channel, will depend on the eventual trade deal between  the UK and EU, if there is one, and on how it is interpreted over time.

The checking of compliance with rules of the origin, labelling and safety of goods will cause delays.

Even if there is a special arrangement for Northern Ireland, these matters will have to be checked somewhere, at some border, or in some port, somewhere. Such checks are a  necessary requirement for the free circulation of the goods in question in EU Single Market. I have no doubt that this is well understood here in Britain, given that Britain, under the leadership of the late Lady Thatcher, did so much to create the EU Single Market. Now that the UK is leaving, I can assure you that Ireland will be doing everything it can to preserve and enhance that remarkable achievement …the Single Market

The genius of the combination, of common EU membership of the UK and Ireland, with the Good Friday Agreement, reduced the sense of separation between both parts of Ireland, and between each part of Ireland and the island of Britain.

That made the two communities in Northern Ireland more willing to live with constitutional and institutional arrangements, that they might otherwise have regarded as less than ideal. That benign combination, of the Good Friday Agreement and joint membership of the EU, will now be brought to an end.


As I mentioned already, Brexit has the potential to complicate cooperation between 28 or more European countries in the struggle against terrorism. Cooperation is much easier between countries adhere to common standards, uniformly interpreted under the aegis of a common European Courts system. Information can more easily be shared, new terror threats identified, and common responses agreed, in a common European system than would be possible if all we have between the UK and the EU are a series of ad hoc bilateral agreements.

Without commonly agreed protections, cooperation will become more difficult, because one will no longer have the same assurance about how the receiving country will treat the people, or the information, that one gives over.


As far as military security is concerned, the problem is less acute, because the UK will remain a member of NATO.

But, as with police cooperation,  things will not stand still.

It is likely that greater use will be made of Article 42 of the EU Treaty which allows for a common security and defence policy, with operational capacity, to be developed. The UK  used to be able to slow down use of these EU powers, and did so because it wanted any action to be under the aegis of NATO. After Brexit that will no longer be the case.

Mutual solidarity will be reduced. Outside the EU, the UK will no longer be able to benefit from the legal obligation, imposed on all EU states, by Article 222 of the EU Treaty, of help where an EU state is

 “ the object of a terrorist attack or the victim of a natural or manmade disaster”.

Outside the EU, the UK will not be taking part in meetings of the European Council which , under Article 222 must  “regularly assess threats”, whether  from within and outside the EU.

It is impossible to predict the difference the absence of the UK will make, but I am sure that regular meetings with EU colleagues, even when there is no urgent threat to be tackled, greatly facilitate speedy action when a threat does arise. UK Ministers will have less informal, casual, or routine contact with their European counterparts. Meetings will have to be set up specially.

From an Irish point of view, a lack of ongoing contact between the UK and EU could have negative consequences. A threat to the UK interests is very often a threat to Irish interests too. For example, Ireland has the same electricity grid as the UK, and our air space and territorial waters are contiguous, as is our territory on land. A threat to one of us is potentially a threat to both.

Other fora for joint work between the UK and EU states will need to used more fully.


Under Article 3 of the NATO Treaty, NATO members are working on “Resilience”, namely the protection of the critical infrastructure of member states. This would include the electricity grid, the commercial and health communications network, and air traffic control.  It will also involve anticipating future threats, based on the acceptance that greater interdependence across borders makes modern societies more vulnerable.

Ireland is not a member of NATO.

Now that the UK is leaving the EU , Ireland , as a member of  the NATO Partnership for Peace, may, however , have an interest in cooperating with all its European neighbours, including the UK, in this work on  the Resilience of shared networks. This would be for the protection of our own Irish people.

Ireland will also find that it is in its own interest to ensure that the EU, using Article 222 of the EU Treaty, actively helps member states that encounter threats.

Given the increasingly self oriented attitude of the present US Administration, it will be in nobody’s interest to allow Defence policy become a fault line between post Brexit Britain, and the European Union.

Working together on these matters is not a bargaining chip for negotiation, it is in the  existential interest for both parties.

So too, and for similar reasons, is the continued close cooperation between the EU and the UK on climate change.


So when the Brexit  negotiations become fraught, as they undoubtedly will, UK and EU negotiators need to remind themselves that we have more in common than divides us, and that we each live, close beside one another, in a continent whose global weight is much less than it was 100 years ago.

In 1900, we, Europeans, made up 25% of the world population, now we are barely 7% .

At the other end of the Eurasian land mass, China will double the size of its economy in the present decade. It adds to its GDP by an equivalent of the entire GDP of Turkey….every year.

China has ambitious plans for its global role, and China has the executive coherence necessary to realize those goals.  It is thinking in ambitious geographic terms .It is promoting global connectivity through its “One Belt, One Road” concept.

The UK’s access to that Road, across the Eurasian land mass, runs entirely through the EU.

T he access of Ireland to that Road runs mainly through the UK!

I will now turn to the internal dynamics of the EU itself, as I expect they will evolve in coming years.


The European Commission has produced a White Paper which sets out five, rather stylised ,  scenarios.

These scenarios are

  • Continuing on as we are
  • Doing nothing but maintaining the Single Market
  • Allowing countries that want to go ahead with more intense integration, to do so within the EU legal order, and with the possibility for others to join later
  • Doing less more efficiently
  • Doing much more together.

Given that it is difficult for 27 countries to agree on new tasks (It was much easier when there were only 9 or even 15 members), I think the first option, continuing on as we are, will be the easiest to follow. This is especially the case if the EU remains unwilling to amend its Treaties

The last option, doing much more together, does not have public support at the moment, but that could change suddenly, if some external shock made it easier to overcome the normal resistance and inertia. Among the activities envisaged, under the doing much more together option, are a single European anti Terror agency and a single coast guard. These are not farfetched ideas, and indeed may be inevitable if passport free travel across member state boundaries is to continue.

The option of doing nothing, but maintain the Single Market. is not very helpful in my view.  In truth, it is almost impossible to agree where the Single Market ends, and other policies begin. The Commission argued  that this ”Single Market Only” option would make it more difficult to conclude more or deeper international trade agreements, because differences in standards would persist within the EU.

The option of “doing less more efficiently” is not very different. It would involve pursuing Single Market integration vigorously, but going slow on regional policy, and on social and public health policies that do not relate directly to the Single market. This option may appeal to net contributor countries, like Germany and perhaps Ireland, but would not appeal in Central and Eastern Europe. It may appeal to outsiders like the UK, Norway and Switzerland as it might reduce the fee they would pay for access to the Single market. But it would be strenuously resisted by many poorer EU states.

The idea of allowing some countries to “go ahead without the others” is one that has been around for a long time, and is actually provided for in Title IV of the EU Treaty governing what is known as “Enhanced Cooperation”.

While this provision has not been much used, it could be said that the euro, and the Schengen  border control free zone, are already  forms of enhanced cooperation.

I do  not see Enhanced Cooperation  as an ideal way forward for the future, because it dilutes the democratic unity of the EU, and this is already put under enough strain by the division between Euro and “not yet Euro” members. The Commission saw this scenario as allowing some countries to go further ahead on defence cooperation while other members might hang back.


It has, however, to be recognised that influence of a member state in the EU will be commensurate with its commitment and solidarity to and with other EU members.

A country that only wants to take part in policies from which it will gain, while going slow on things that might involve costs for it, will have less influence in the EU, and might not receive solidarity when it needs it, but it is hard to quantify this.

Putting it another way, an EU which encourages some countries to go ahead while others hang back could quickly divide between” policy maker” countries,  and “policy taker” countries. This is why Ireland has traditionally resisted a “two tier” Europe.


Public opinion also needs to be taken into account, in working out the priorities of the new EU without the UK, and  public opinion on what should be EU priorities varies widely between countries.

When citizens in the 28 member states were asked in April 2016, just before the UK Referendum, what they wanted the EU to prioritise, they came up with quite different answers in different countries.

When it came to fighting against Terrorism, 80% of Greeks wanted the EU to do more, and 69% of Italians did,  as against only  33% of the Dutch and  44% of Danes. At that time, 66% of UK citizens wanted the EU to do more against terrorism, but then decided to leave anyway.

After France, 55% of UK citizens in April 2016 perceived their country as being under  a high threat of a terrorist attack, as against  only 11% of Irish people, 9% of Latvians and 8% of Estonians.

This was not the only contrast.

69% of Swedes and Spaniards wanted the EU to do more about the Environment, but only 28% of Estonians did .

Understandably, at the height of the Syrian asylum seeker crisis, EU action on Protecting External Borders was a priority for 73% of Greeks, but  only 43% of Irish people and  35% of Swedes and Latvians wanted the EU to prioritise that.

The dividing lines on whether the EU should do more on Security and Defence were quite revealing.

Overall and on average, 44% of EU citizens  felt the EU should be doing more about Security and Defence.

But, to my surprise given their proximity to Russia, only 30% of Latvians and Estonians, and 25% of Danes, did so.

In contrast, 60% of Greeks and 56% of Italians felt the EU should do more on Security and Defence. 56% of French citizens felt the EU should do more, but only 41% of Germans, which suggests that , a year ago anyway, there was not an overwhelming public demand for an EU defence policy.

But that was before the election of Donald Trump, and his disturbing omissions on European Security during his recent visit to Europe.


Finally, given the low oil prices at the time, it is perhaps not surprising that so few European felt the EU should be doing more on Energy supply issues.  Yet a Single Energy market was identified as a priority issue by the European Commission even in their “Continuing as we are” scenario I mentioned earlier.

In 2016, only 36% of EU citizens felt the EU was not doing enough on the issue of Energy supply. The greatest support for more EU action on Energy supply was  in Greece  and Spain ( both 54%). But in the Czech Republic, only 18% felt the EU should do more on Energy Supply questions.

Given that Ireland is so completely dependent on, what will soon become a non EU country, for access to the international  electricity grid, it interesting to note that support for a common EU policy on Energy Supply was below the EU average in Ireland, at a mere 33%.

I expect that that will change and that Ireland will seek assurances on continuity of supply in any Brexit Agreement, and will want the support of its 26 EU partners in that.


The recent UK General Election result did not endorse Mrs May’s very specific plans for a hard Brexit. The loss of support for the outgoing government in London, and in university towns, underlines this.

It now looks as if the next government will be a coalition of some kind between the Conservative Party and the Democratic Unionist Party (DUP).

Agriculture will be the subject to watch in any DUP/Conservative deal.

How will the incomes of farmers in Northern Ireland be protected and how will freedom of access for Northern Irish food products to the EU market south of the border be preserved?

Given the commercial interest many Democratic Unionist supporters have in trade across the border in Ireland, the Conservative Party may have to drop its insistence on leaving the EU Customs Union, to avoid the necessity of extensive and time consuming checking of goods crossing the border.

As a Unionist Party, the DUP will favour UK wide solutions rather than a special deal for Northern Ireland alone, and this may help ease the impact of Brexit on East/West trade between Ireland and Britain as well. That would be welcome.

If it were to decide to stay in the Customs Union,  the UK could of course, not do trade deals of its own.

But I believe there was little evidence  the  deals UK could do, outside the Customs Union,  would compensate it for the  deals it would lose by leaving it,

  • 295 trade deals, and
  • 202 deals on regulatory cooperation.

I hope the people of the UK will now have the sort of honest detailed, sector by sector, debate on what Brexit might mean, a debate that they so markedly failed to have during the General Election campaign.

John Bruton, former Taoiseach, delivering the Grattan lecture in the Irish Embassy in London on Monday 12 June 2017



bonnetThis long article by Andrew Duff, a former MEP, draws on the recent House of Lords reports on the subject, to illustrate how complicated the Brexit negotiations must inevitably become. 

After 40 years of interdependence and common rule making, the UK is now setting out to reconstruct the entire apparatus of a separate nation state, with separate rules, and separate rule making and  adjudication systems. This is how Theresa May has chosen to interpret the referendum result, by ruling out any jurisdiction of the ECJ.

A nation state apparatus, that would have sufficed in the 1960’s, will not suffice for the 2020’s, because the world is much more interdependent, more interconnected, and faster moving, now than it was then.

The exercise the UK is undertaking will involve establishing a new bureaucracy, to deal separately with all the regulatory questions that previously were delegated by it for collective decision within the EU. The EU superstructure will have to be replicated in London, at some cost.

The UK may want to develop separate standards for many goods and services, but, if it does so,  UK firms will have the extra cost of complying, not only with the new UK standards, but with EU standards as well for any goods and services they wish to export to the rest of Europe.

There will thus be duplication at firm level, as well as at government level.

The only way to minimise this would be to go for a “soft Brexit”, whereby the UK would adopt EU rules, but without having a vote on those rules.

Such an option may be sustainable business wise, but it will not be sustainable politically in the medium term.

It would represent a substantial diminution of UK “sovereignty” relative to the “sovereignty” the UK now has as a full EU member. This would soon become politically unacceptable to the British people.

One can easily imagine the anger of the “Daily Mail” about the UK having to enact, and enforce, EU standards, on which the UK had had no vote!  But that is what a soft Brexit would entail.

For these reasons, a “soft Brexit” will only be a temporary arrangement, and one should  not invest all ones hopes in it.

I am coming to the view, reluctantly, that the only viable long term options are either

  • a “hard Brexit” or
  • a decision by the voters of the UK to stay in the EU after all.

The latter seems very unlikely indeed at the moment, because UK voters will not want to admit they made a mistake. They have no sentimental attachment to Europe anyway and sentiment seems to trump economics in voter’s minds nowadays.

But that could change gradually.

British people are, many for the first time, now learning about what the EU really is.

At the best of times, British people were never very curious about the EU or how it worked. Now they are required to find out, as part of the exit negotiation. It will be something of a revelation!

For 40 years, UK voters have been passengers in the EU car. Now, having decided to get out of the car, they are taking a first look under the bonnet.

They will discover how interconnected the different parts of the engine are, and how difficult it would be to link into some, but not into all, parts of the engine.

The UK will have to build its own engine from scratch now, and decide in which direction it wants the new car to travel. There was no consensus at all on the latter point on the “Leave” side in the referendum. Some want a more globalised Britain, the majority wants the exact opposite.

Ireland will be a spectator in this process.

The physical isolation of Ireland from the rest of the EU, in the event of a hard Brexit, is a problem that will need much thought at EU level, in the interests of European solidarity.

Experts in logistics, transport and communications need to be brought together at EU level, to examine how the costs of this physical isolation of Ireland can be minimised.

Commisioner Verstager, who is responsible for EU competition policy, should look at what needs to be done to ensure that states that are physically isolated from the core of the EU, like Greece, Malta, Cyprus and Ireland,  can always participate on an equal basis in the internal market.


Italy and EU Puzzle Pieces - Italian and European Flag

Italy and EU Puzzle Pieces – Italian and European Flag

Crunch decisions are approaching for Italy and its new Prime Minister Paolo Gentiloni.

The really difficult decisions are not about who gets which Ministry in the new government, or even about the timing of elections, but about how to cope with the problems of some of Italy’s banks.  

On Friday last the European Central Bank rejected a request from Rome to delay a proposed private sector  led rescue of Monte Paschi di Siena (MPS), Italy’s oldest and most troubled bank.

According to the Financial Times, this leaves Italy with little option but trigger a government led bailout of the bank which will involve imposing losses on junior bondholders in the bank, many of whom are small savers rather than anonymous financial institutions. “Burning the bondholders” thus does not have quite the same popular appeal in Italy as it had in Ireland a few years back!

But the burning of bondholders, in a bank that has to be rescued by the taxpayer, is now required by EU rules, and the EU is a rule based institution. The primacy of rules, rather than of raw power, are what distinguishes the EU from other international arrangements, and are among the reasons EU membership is particularly valued by smaller countries, like Ireland.

Avoiding a taxpayer led bailout of MPS, by forcing the other Italian banks, who are better off than MPS, but have troubles of their own, to bail out MPS could infect the  entire Italian banking system and weaken confidence in it.  And all banking, like all money itself, depends on confidence. As it is, Italian banks have only half the capital they need to meet  the required safety standards.

Of course it is true that if the Italian economy was growing more quickly, its banks would not be in such trouble. The Italian economy is expected to grow by only 1% this year, well below the EU average. In fact the Italian economy is the same size as it was in 2007, whereas other countries , which are also subject to the  disciplines of the euro zone, have grown substantially since 2007, France by 20% and Spain by 15%.

This contradicts those who want to blame the euro for all Italy’s problems.

For example, David McWilliams has mistakenly claimed  that “the strictures imposed by the euro have destroyed the Italian economy”. He said that Italy’s economy grew, before it joined the euro. But it was only able to do this because it repeatedly devalued its currency. This gave temporary relief but concealed the underlying problems. Devaluation was an anaesthetic, not a cure.

Once it joined the euro, this had to stop

When  Italy’s  leaders decided to join the euro, and  set the rate of exchange between the old lira and the  new euro, they  knew  that  devaluation was impossible thereafter. This was a freely taken Italian decision.

Unfortunately Italian voters do not see things that way and blame Europe for problems that are actually home grown. For example in a poll last September, only 38% of Italians felt their country had benefitted from being in the EU, whereas 51% felt it had not .

In truth, the problems of the Italian economy predate the decision to join the euro. Government debt levels were increased during the 1980’s and were already  well above the recommended 60% of GDP  when Italy joined the euro.

Italy was already an ageing economy at that stage, with early retirement and historically low birth rates. The ageing of a society inevitably saps its growth potential, as even the Chinese are now beginning to find.

There was the added difficulty, since 2000, that the Italian consumer and fashion goods sector competed directly with goods coming from Asia, and Italy could no longer devalue  to meet this  new competition.

Italy did not adapt to this new reality.

Productivity remains poor in Italy.  For example, since 2007, Spanish productivity per hour increased by 10%, whereas Italian productivity per hour actually DECLINED by 5%. Both Italy and Spain are in the euro, so the euro does not explain this difference in  productivity performance.

The public sector in Italy is expensive and inefficient. The hourly pay rate in the Italian public sector is 40% above that in the private sector, whereas in France and Germany, the hourly rate in the public sector is below that in the private sector.

Incidentally in Ireland, hourly pay in the public sector is 25% above that in the private sector.

In Italy, healthcare and pensions absorb 20% of GDP, as against 12% in Ireland.

There are also severe inefficiencies in Italy’s commercial sector caused by lack of adequate competition. The transport and energy sectors are particularly costly.

There is a lack of competition in the legal system. The Italian courts are the third slowest in the EU. For example it takes 500 days to get a case into court. This means that it is difficult and costly for Italian businesses to enforce contracts and collect debts owing to them. Court delays have also contributed to the increase in non performing loans(NPLs) in the Italian banking system. NPLs are now 18% of all loans, as against 6% in 2007.

A Competition Bill, which would have helped resolve some of these problems, was watered down in the bargaining between the Senate and the Lower House.

Renzi’s constitutional reforms, which would have reduced the power of the Senate, would have dealt with that problem. Unfortunately they were rejected by the voters.

The Gentiloni government, like that led by Renzi, has a  majority in the Lower House, but will  now face an increased risk of  any reforms it proposes, being bogged down in the  Senate, because the Senate  will feel empowered by the referendum result.

The electoral arithmetic may have changed, but the arithmetic of Italy’s debts has not.

Leaving the euro would actually increase the nominal value of those debts, because the debts would still be owed in euros, but the money to pay them would have to be raised in a new, and probably, less valuable Italian currency.

Resolving Italy’s problems will require statesmanship of a high order in Rome, Brussels, Frankfurt and Berlin. Ireland overcame a similar crisis since 2010, and the willingness here of all sectors of society here to meet the painful challenge quickly , and leave politics aside till later, may provide a model that Italy could follow.

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