John Bruton

Opinions & Ideas

Category: Ireland (Page 1 of 5)

HOW THE IRISH CONSTITUTION OF 1937 CAME ABOUT, AND WHY IT HAS PROVED SO DURABLE.

A study of all constitutions promulgated since 1789, by the Chicago Law School, found that the average constitution lasted a mere 17 years before it was replaced. By that measure, the Irish Constitution, which will be 80 years old next month, has been a remarkably durable document. Indeed it is now one of the world’s oldest written constitutions.

Eugene Broderick, the author of this book on the subject, attributes the durability of the Irish constitutions to the fact that it can be amended by referendum and reinterpreted through court judgements. In that sense, the present constitution lives up to the standard set for a constitution by Eamon de Valera, in 1933 before he started preparing it, that it should be “not a cast iron constitution, but a flexible constitution”.

According to Broderick, most of the actual drafting of the articles of the constitution was done by the then legal advisor to the Department of External Affairs, John Hearne.

A REDMONDITE WHO WORKED WITH DE VALERA

Hearne is an unusual character. A native of Waterford City, he was a strong supporter of John Redmond, and helped his son, William Archer Redmond to defeat the Sinn Fein candidate in the Bye and General Elections of 1918. Hearne was a prominent public speaker in the campaigns, and earned a name as “the boy orator” of the Irish Party. He was one of a generation of young men, who would have risen to prominence in a Home Rule Ireland, but who had to find another way forward when Home Rule was buried by the violence initiated in Easter Week of 1916.

Hearne’s way forward was initially as a barrister, and then as a legal officer in the Free State army. In 1924, he joined the civil service and remained a civil servant until he retired in 1960. His first post was as Assistant Parliamentary Draftsman in the Office of the Attorney General. He became an expert in international constitutional law, and helped Free State Ministers, like Paddy McGilligan, and Kevin O Higgins, to loosen the bonds set in the Treaty and thereby move Ireland towards full independence, by exclusively constitutional methods. Many of the issues Hearne dealt with in the 1920’s, like the court that should decide final appeals, are coming up again, as the UK tries to unravel its 40 years of legal commitments with its EU partners.

When de Valera won power in the 1932 Election, he admitted that he was surprised by the amount of progress he found had already been made by his predecessors in enhancing the sovereignty of the Irish state.

DE VALERA FELT A NEW CONSTITUTION NEEDED TO A  SOVEREIGN, AND PURELY IRISH, ACT

But he still adhered to his Civil War opinion, that the Free State Constitution, under which he had come to office, was something imposed on Ireland by the threat of force.

Therefore he saw a new constitution, freely adopted by the Irish people in a referendum, as the ultimate expression of sovereignty.

When de Valera sat down to prepare a draft constitution, he did so within a very narrow circle of advisors, and the principal one was John Hearne.

This is surprising given Hearne’s political antecedents. But Hearne had unequalled expertise in the constitutions of other countries, and fully accepted de Valera’s goal of shaking off the remnants of British influence. De Valera and Hearne worked into the late hours, often in Hearne’s home, drafting and redrafting the articles of the proposed constitution.

Broderick deals with the external influences brought to bear on the draft. Ministers, other than de Valera himself, seem to have played little part. De Valera preferred to work with civil servants over whom he had more control, rather than Ministers.

RELIGIOUS ASPECTS SHOULD NOT CAUSE SURPRISE, GIVEN THE VIEWS OF IRISH PEOPLE AT THE TIME

Religious thinking about social matters influenced the constitution for the simple reason that it influenced the Irish people in their daily lives. In the 1930’s, Ireland was a very religious country. In the destructive and nihilistic aftermath of War of Independence, the Catholic faith was seen by many as a better expression of the people’s distinctive identity. That is why it influenced the constitution. Fianna Fail, and all the other parties in the 1930’s, were profoundly influenced by Catholic Social teaching ,so it is not surprising at all that this teaching would have been taken into account.

As a practical politician, de Valera did not want the Catholic Church to oppose the proposed constitution.

This explains the Constitution’s acknowledgment of the Catholic Church’s special position. Some  Catholic church leaders wanted the constitution to say that the Catholic Church was the one true church, but de Valera resisted this.

Broderick says the ban on divorce was not controversial with other Christian churches at the time.

John Charles McQuaid, not yet a bishop but the Headmaster at the time of De Valera’s old school in Blackrock, played little part in drafting the constitution.

BUT THE CONSTITUTION DID NOT ACCOMMODATE THE POSSIBILITY OF A UNITED IRELAND IN ANY PRACTICAL WAY.

This was a constitution written for the 26 counties which de Valera actually governed. It was not designed for a 32 county Ireland. If it was it would have been drafted differently.

As Broderick puts it “Sovereignty took precedence over reunification”. This was realistic, and therefore right, in the circumstances.

Unrealistic aspirations, like reunification and the restoration of the Irish language, were included in the constitution in order to garner support for it in the referendum. The difficulties with these aspirations were ignored and this inevitably led to disappointment and cynicism.

One fault I would find with this book is that it tells us little or nothing about John Hearne’s subsequent career, as Irish Ambassador to Canada, and to the US, and his time as legal advisor to the new Nigerian government in the 1960’s. Apart from the fact that his wife provided sandwiches for Dev for the late night drafting sessions, Hearne’s marriage is hardly mentioned. It is almost as if his life stopped, once the constitution was adopted.

That criticism aside, anyone who wants to understand the genesis of our constitution, should read this important and well-written book.

It is entitled  “John Hearne, Architect of the 1937 Constitution of Ireland” , the author is  Eugene Broderick and the book was published by the Irish Academic Press.

This review appeared in last week’s  “Irish Catholic “ newspaper.

OPPORTUNITIES FOR IRELAND, AS DIVISIONS OPEN UP IN WESTMINSTER ON BREXIT……. BUT SINN FEIN STILL STAYS AWAY

Very slowly, the UK public is beginning to learn the implications of the decision they took to leave the EU.

Some of the realities were revealed in the contrasting evidence given last week by the Brexit Secretary of State, David Davis, to one Committee of the House of Commons, and by Sir Ivan Rogers, recent former UK Ambassador to the EU, to another Committee.

The contrast in the two testimonies was remarkable.

David Davis said that he believed the UK could wrap up a Customs and Trade deal with the EU before March 2019.

DUP WOULD TOLERATE A NO DEAL SCENARIO

Pressed by the DUP’s Sammy Wilson, he said that “No Deal” was still an option. “No Deal” would involve the immediate imposition of severe border controls in Ireland from 1 April 2019. Sammy Wilson gave the strong impression that he did not particularly care about this and that he wanted “No Deal” to remain a live option, presumably in the hope that it could be used b the UK as a threat.

There was no Nationalist MP present to point out the devastating effects “no deal” would have on border communities, both unionist and nationalist. This is because elected Sinn Fein MPs refuse to take their seats.

Their absence leaves “No Deal” tolerant MPs, like Sammy Wilson, a clear field to present a false impression of the true interests of the people of Northern Ireland.

Sinn Fein ought also ask themselves if the issues on which they are delaying the re-establishment of the Northern Executive are more important to their people than Brexit.

Since the Good Friday Agreement, abstentionism is an out of date policy and undemocratic policy. It deprives the nationalist inclined people in Northern Ireland of a voice or vote when key decisions on Brexit, affecting their livelihoods, are being taken in Westminster.

BREXIT WOULD DEEPEN PARTITION AND SINN FEIN ARE NOT THERE TO VOTE AGAINST IT

Sinn Fein MPs are staying away, even though their votes could swing the decision on key votes in Westminster on the Bill that will take their constituents out of the EU, and deepen the partition of Ireland.

Sir Ivan Rogers, in his testimony, told the MPs that a “no Deal” scenario would be very bad for the Irish economy. This was because 80% of Irish exports go to market either through, or to, the UK. A hard Brexit, that involved heavy controls at ports and border posts, would be devastating for Irish trade.

In contrast to Secretary of State Davis, Sir Ivan Rogers said in his testimony that, far from a UK/EU trade deal being wrapped up by March 2019, negotiations on the detailed contents of such a deal could not even START until the UK had actually left the EU, in other words not until April 2019!

He went on to point out that the “Deep and Comprehensive Trade Agreement” that the UK would have to negotiate, in substitution or EU membership, would probably have to run to thousands of pages, every line of which would have to be haggled over with the Commission and with the 27 remaining EU states.

This negotiation of a detailed Trade Agreement would have to be foreshadowed in Framework for future relations document, to be agreed between the UK and the EU, alongside the divorce agreement.

UK GOVERNMENT CANNOT EVEN DECIDE WHAT SORT OF FINAL DEAL TO ASK FOR

But the UK government is not in a position to agree within itself on what it would want that Framework to contain. It cannot even discuss the question at Cabinet meetings because it would split the Tory Party irrevocably.

Sir Ivan speculated that, because of this, it would, therefore, be the EU side that would draw up the first draft of the Framework, on which the eventual Trade Deal would be based. But even that can only happen if the UK had agreed to pay its share of all bills incurred by the EU while the UK was still a voting member. That would add £13 billion to UK liabilities.

There is likely to be a big bust up over this money issue in December.

Assuming that is overcome, Sir Ivan said that there was a huge difference between the sort of trade agreement that might eventually be offered to the UK, and the access the UK would have had if it stayed in the Single Market.

The Single Market covers standards as well as tariffs. It has, embedded and agreed, mechanisms for making, enforcing, and adjudicating on the meaning of, those standards. Once the UK leaves the Single Market, the compliance of UK originating goods and services with EU standards could no longer be assumed by EU countries, like Ireland.

This would create immediate new barriers to commerce of all kinds. It could even apply to acceptance of the safety of aircraft owned by UK based airlines.

UK court judgments would no longer be automatically enforced in the EU, and extradition would become more difficult.

This makes the casual attitude of the DUP and Sammy Wilson to the possibility of “no Deal” all the harder to understand, given the DUP’s long standing concerns about paramilitarism.

IMPLICATIONS OF BREXIT BEING HIDDEN

In his testimony, David Davis said that his Department had done studies of the impact of Brexit on 57 different sectors of the UK economy. He said he would not publish these because to do so might “weaken the UK’s negotiating position” with the EU. This means that the UK Parliament and the public are being kept in the dark about the known consequences of decisions they are taking, or are being taken on their behalf.

And there is no MP, and no Executive, from Northern Ireland there to challenge this!

The EU 27 are now beginning work on the sort of Framework agreement it might offer the UK, if the UK first comes forward with adequate proposals on money, EU citizens rights, and the Irish border.

Drawing up the Framework to offer the UK is going to be exceptionally difficult work for the EU, including Ireland. Preserving the integrity of the EU Single Market, and all the investment our continuing membership of it has brought to Ireland, will have to be balanced against access to the UK market and making practical arrangements to take account that the UK and Ireland are beside one another and have a long and porous border.

The trade offs will be really difficult, but it would appear Ireland is better prepared for the discussion than are our neighbours in the UK.

A RECKLESS GOVERNMENT, INFLICTING DAMAGE ON ITS OWN PEOPLE, AND ON ITS NEIGHBOURS

Tony Connelly begins this book about Brexit,

“Brexit and Ireland, The dangers, the opportunities and the Inside Story of the Irish response”

with an apt quotation from the recently deceased American novelist, James Salter, describing a passenger leaving home on a liner pulling away from the quay:

“ a fatal space has opened, like that between a liner and the dock, which is suddenly too wide to leap; everything is still present, visible, but it cannot be regained”.

In 2017, the UK has decided to leave, but is still fully in the EU. We are living the past, but it is over.

Since June 2016, a fatal space between the UK and the EU has opened, and is getting wider every day. The captain of liner feels obliged by a majority of the passengers to leave port, but she is unclear where her ship might dock next. The decision of the majority of the passengers is all that matters to her now.

Tony Connelly’s book thoroughly explores all the possible consequences of Brexit, with particular reference to Ireland.

These will, in some measure, affect every country in the EU. The book deserves to be read in every one of the 28 EU capitals and by everyone whose livelihood depends on trade relations with the EU or the UK. But the effects of Brexit will, of course, be most intensely felt in Ireland.

Geography matters. After Brexit, Ireland will be geographically isolated from the rest of the EU.

Ireland has to export 90% of the food it produces, and 43% of that food goes to the UK. Meanwhile, Ireland imports virtually all its energy via pipelines and cables coming through or from the UK. As Connelly puts it, Ireland feeds Britain during the day, while Britain keeps Ireland warm at night!

All this interdependence would not be possible without agreed standards, and agreed systems for enforcing and adjudicating upon, those standards. These all emanate from the EU and the European Court of Justice (ECJ). The same applies to cross border arrangements for chemicals, aviation, the sale of television programmes, and even transporting horses to and from race meetings.

Once the UK “takes back control” from the EU, and rejects a common adjudication system under the ECJ, the basis of this profitable, and uniquely convenient, mutual traffic between the UK and Ireland, will erode.

Tony Connelly examines how this process will affect every part o the Irish economy, from medical device makers whose UK suppliers will no longer be EU certified, to the mushroom exporters whose perishable products could ace fatal delays getting to UK supermarkets in time.

This book is particularly good in describing the effect of Brexit on the dairy and beef sectors.

It is no mere desk exercise. The author has spoken directly to those involved in each sector. Half the “at risk” jobs in the food sector are in parts of Ireland where incomes are well below the EU average, even though Ireland itself is above that average. In Ireland, the effects of Brexit will aggravate existing inequalities.

Outside the food sector, there is more room to adjust. Connelly cites the example of a Wicklow software business which has been able to reduce its export dependence on the UK market from 70%, to a mere 15%…in just one year.

Meanwhile, based on numerous interviews, he traces the reaction of the Irish government to Brexit.

Initially, there was a focus on discussions with the British, but it soon became clear that there was a limit to the usefulness of this.

The UK did not have a plan.

The collective mind of the UK Civil service did not fully grasp the relationship between the Good Friday Agreement and membership of the EU Single Market by both Ireland and the UK.

This gulf, between the agreed Tory rhetoric about Brexit, and the realities on the island of Ireland was worsened by UK General Election called by Theresa May. Virtually all the MPs, elected by Northern Irish constituencies, either refused to take their seats or are now committed to a deal to support the Tory government on all Brexit issues. Although legally still part of the UK, Northern Ireland has no effective voice or vote, in Westminster, on the Brexit legislation.

The Irish government has inevitably turned to its fellow EU member states, and to the European Commission, to find a way to mitigate the damage of Brexit.

Connelly describes the intense contact between every Irish interest group and the Barnier negotiating team. Barnier understands the Irish issues thoroughly. But that does not mean he can provide reassuring answers.

This is because, as Tony Connelly puts it,

“Everything about the reality, from the EU’s non negotiable Customs Code, to Britain’s determination to do trade deals around the globe, to the phyto sanitary (disease control) requirements, all scream “hard border”.

According to Theresa May, It remains “overwhelmingly and compellingly” in Britain’s interest that the EU succeed.

But the EU is a voluntary Union, and it can only continue to exist if there is willing implementation of agreed rules. As this book shows, the UK Brexit policy is testing that, in a reckless way.

I am convinced that the only way to avoid a really hard Brexit is for the time for the negotiation under Article 50 to be increased from 2 to 6 years.

Yesterday in Parliament, the UK Prime Minister said that a transition period only made sense if there was an agreed concept of what one was transitioning towards. It is impossible for an agreement to be reached on that concept in the next twelve month, especially as there is no agreement within the UK government on what they are looking for! Her statement evoked surprise on the part of people who should have known better.

It was fundamentally reckless of the UK Government to write its legally binding Article 50 letter, without having first agreed within itself on the outline of a viable deal for the UK, that would enable to EU to maintain the integrity of the EU Single Market.

Instead, the UK wrote the letter, and then proceeded to rule out all the viable options that might achieve this, like the Norway model, or the UK remaining in the Customs Union. All ruled out without proper examination or public debate. Meanwhile, studies that the UK Government itself has done on the impact of Brexit on individual sectors of the UK economy are being concealed from the public.

This recklessness of the UK Government will inflict immense collateral damage on Ireland, as Tony Connelly’s book shows in painful detail.

 

 

 

 

 

Liam Cosgrave put country before politics

Article on The Irish Times

His election slogan in the 1973 general election campaign sums up what Liam Cosgrave’s political career was about.

It was: “Cosgrave puts the nation first”.

Before ever he became taoiseach, he had lived up to that claim . . . twice.

In 1970, he obtained information that some ministers in the government led by Jack Lynch had been involved in the illegal importation of arms into the State with a view to their supply for use in Northern Ireland, and that public funds were involved.

It was sensational information, with which he could have gone public to his own advantage, as leader of the opposition and would-be taoiseach. He could have brought the matter to the floor of the Dáil, precipitating a full-blown political and constitutional crisis, and possibly a general election.

He did not take that course. He realised that the institutions of the State are inherently fragile. This was especially so in 1970, when nationalistic passions and political violence were on the increase. Cosgrave wanted this dangerous situation to be dealt with in the most orderly possible fashion, by a government in place.

So he decided privately to notify Lynch of what he had learned, and allow him some space to take action, which he did.

It is impossible to know exactly what might have happened if Cosgrave had never brought this information to Lynch’s attention, but it is certain that the interests of the State would have been put at grave risk.

The second occasion on which Cosgrave put his country’s interests before his own was even starker. This was when, in 1972, he was determined to support the Offences Against the State legislation, promoted by the Fianna Fail government, but opposed by a majority of Fine Gael TDs.

The Fine Gael deputies preferred the approach of the party’s justice spokesman, Pat Cooney, who argued that the legislation involved too great an incursion into basic civil liberties. Cosgrave was on the brink of being ejected as party leader on this issue when public sentiment was altered by a bombing in Dublin which highlighted the risk of subversion. Fine Gael rowed in behind its leader and his position was vindicated.

Cosgrave was not a conventional, consensus-hugging politician. As in the case of the Offences Against the State Act, he was prepared to take great risks on issues on which he held strong beliefs.

He also stood out against his own party in the matter of the electoral system. He did not like proportional representation, believing it led to weak government.

He may have come to this view because of his experience as chief whip of the interparty government of 1948 to 1951, which consisted of five parties and several Independents.

While open to criticism, his decision, in a free vote, to vote against the contraception legislation introduced by his own government showed he was willing to step outside convention on matters on which he held a firm position.

Yet he was a very effective chairman of government.

He was meticulous in ensuring that the commitments given to the LabourParty to induce it to form the coalition with Fine Gael were honoured. He had a good relationship with Labour leader Brendan Corish, forged during their long prior years together as parliamentary colleagues, and their shared interests, particularly in horse racing.

He was a deeply religious man, attending Mass every day, and he believed this life was a rehearsal for something greater.

His stances in 1970 and 1972 showed that had a strong sense of the integrity of the State and its democratically controlled institutions, such as the Army and the Garda. He had no time for paramilitarism of any kind. The State alone had the right to use force. He understood that chaos would arise if that was brought into question. This probably derived from the experience in 1922 of his father, WT Cosgrave, when, before the Free State was properly established, order broke down completely in many parts of the country.

As Fine Gael leader, Cosgrave was tolerant of free speech, dissent and debate within the party, to a degree that would be surprising to modern eyes, which expect political parties to present a smooth veneer of unity at all public party events.

I remember being involved, as secretary of the Fine Gael youth group in the 1967- 1968 period, in tabling publicly controversial motions, with others, seeking to change the name of the party and promoting slates of candidates to oppose outgoing officers supported by the leadership, and then having these matters openly debated and voted upon at the party ardfheis. No attempt was made by Cosgrave or the leadership to close down such debates, presumably because he felt strong enough not to have to do so – very different from the careful message management prevalent today in all parties.

Undemonstrative

Cosgrave’s undemonstrative, matter- of-fact style of leadership was one I sometimes sought, as best I could, to emulate.

But it was the private aspects of his party leadership that I admired most of all. He was exceptionally kind to less experienced colleagues and understood the human vulnerability that is part of political life. I can testify to this from one personal example

In 1976 I had had a particularly torrid day at parliamentary questions, when I was standing in, in succession, for two senior ministers, Dick Burke and Justin Keating, who were away .

My performance was roasted in the following morning’s newspaper by John Healy, then parliamentary correspondent of The Irish Times. I was sitting disconsolately in my office reading this bad review when I was told the taoiseach was on the line. My immediate thought was that he was going to tell me he had found someone who could do my job better that I could. I was wrong. Cosgrave had seen the paper, knew exactly how I would be feeling, and phoned be just to tell me not to worry about “all that stuff” and keep on with my work. I have never forgotten that kindness.

Something else is lodged in my mind. It is the pride and togetherness he was able to engender among his followers when he rose to address a party meeting. He gave voice to their thoughts and made them proud to be part of Fine Gael. There was a timeless quality to his oratory. It was almost as if one was listening to history. He was his father’s son, and his father had founded this democratic state. There was a deep continuity.

But there was nothing predictable about his oratory. He could be biting and funny in the same sentence. He was indiscreet and sharp sometimes, but, fundamentally, you knew where you stood with Liam Cosgrave.

For me, and those like me who came into political life under his leadership, there is a deep sense of loss today.

For Mary, Liam T and Ciaran, the loss is all the more intense. To them, to his grandchildren, and to all the extended Cosgrave and Osborne families, I extend heartfelt sympathy.

THE IRISH CONVENTION OF 1917…..A  LAST CHANCE TO RESOLVE  ANGLO  IRISH RELATIONS PEACEFULLY……WHY WAS IT LOST?

© By Eric Jones, CC BY-SA 2.0

A century ago on Tuesday, on 25th July 1917, the Irish Convention convened in Trinity College to make what would prove be the  final, non violent, attempt to agree a basis for relations between Ireland and Britain on an All Ireland basis.

Some of the issues the Irish Convention tried to settle one hundred years ago still divide us today….

  • Should partition be temporary or permanent?
  • To what extent should education be denominational?
  • Should Ireland be free to set its own tariffs on imports, or should Ireland and Britain be in a Customs Union?
  • In a 32 county Ireland, what protection might there be for Unionist interests?

The Convention was widely representative.

The biggest group in the Convention were the Irish Parliamentary Party, and John Redmond was among the members.

It was he who had suggested a Convention, when he rejected a suggestion by  the UK government that Home Rule be introduced for the 26 counties only, with the position of the 6 counties left aside for the time being.

The Ulster Unionists were present, led by one of their MPs , JM Barrie.

Southern Unionists also had representation, and their leading figure was Lord Midleton.

There were six representatives of the Labour movement.

The members included the  Mayors of the major cities, including Belfast, the chairmen of a number of County Councils (including I noted Meath County Council), four Catholic Bishops , two Church of Ireland Bishops and the Moderator of the Presbyterian Church.

The President of the Belfast Chamber of Commerce, Mr Pollock, and William Martin Murphy, the Dublin employers leader and owner of the” Irish Independent” , were also among the members.

Seats were allocated to the Sinn Fein Party, of Eamon de Valera and Arthur Griffith, but they refused to take them up because the terms of reference of the Convention did not allow for complete separation between Ireland and Britain.

Although Sinn Fein was not there, the Convention was a unique gathering together of Irish people of widely divergent goals.

Whereas previous attempts to resolve the “Irish Question” had taken place in Westminster in negotiations with British politicians, this was a meeting of Irish representatives, trying to resolve the outstanding issues between themselves, without direct external involvement.

In that sense, it was arguably inconsistent of Sinn Fein, with their “ourselves alone “ philosophy, not to take part, because it would have given them an opportunity to put their case to their fellow Irishmen, without what they would regard as British interference.

Although the constitutional struggle for Home Rule had been going on for 40 years, and Home Rule had passed into law three years before, the relationship between the Unionist parts of Ulster and the proposed Home Rule Government in Dublin remained a matter of deep contention.

 Ulster Unionists had, six years earlier, armed themselves to resist Home Rule and they were encouraged in this by the UK Conservative Party, who even tried, in 1911, to persuade the British Army not to take any action against the Ulster Volunteers. It could be argued that this had been a treasonable course for the Conservatives to take.

Notwithstanding this activity, the UK Parliament had passed the Home Rule Bill into law in September 1914, but its operation was postponed because the Great War had started a month earlier, and it had been felt at the time that all energies should be devoted to winning what many hoped would be a short war.

Three years later, when the Convention convened to discuss how Ulster might fit into the Home Rule scheme, the Great War was still going on. Large numbers of Irish soldiers had been killed on the Western Front and in Gallipoli.

Conscription had been imposed in Britain and in most belligerent countries , but not in Ireland. This was resented by some in Britain.

Also resented in Britain was the  Rising against British Rule, supported by Germany, that had taken place the previous year. Many of those involved were still in prison.

So the atmosphere was fraught, not just in Ireland, but in Britain too.

The Conservative Party, which had gone to such lengths six years previously to oppose Home Rule was now a predominant part of the UK government, although the Prime Minister, David Lloyd George, was a Liberal.

Despite all these difficulties, Irish Nationalist ambitions were high.

Partition was rejected on principle, but no very practical ideas were advanced on how to overcome the opposition to the imposition of Home Rule from Dublin in the counties of North East Ulster.  There seems to have been an assumption that Britain would force Ulster Unionists to accept Home Rule, although the practicalities of doing this, especially during a war in Europe, were never addressed.

The new leader of Sinn Fein, Eamon de Valera, and recently elected Sinn Fein MP for East Clare offered some remarkably simplistic solutions.

He told his supporters in Killaloe that, if Ulster Unionists did not come in under Dublin rule, they would

“have to go under”

Later, in Bessbrook Co Down, during a by election campaign which his party lost, he said

“If Ulster stood in the way of Irish freedom, Ulster should be coerced”.

By attending the Convention, Mr de Valera could have tried persuasion, before resorting to the coercion he was threatening.

He apparently felt  was simpler for him to blame the British for not coercing Ulster,  than it would have been to sit down in the Convention and try to persuade his fellow Irishmen of North East Ulster to accept some form of agreed Ireland.

John Dillon, the deputy leader of the Irish Parliamentary Party warned de Valera of what attempt to coerce Ulster would entail. Speaking in Armagh, of de Valera’s idea that Ulster be forced to “go under”, he  said ;

“Against such a programme Unionist Ulster will fight to the last man living; and to all the other horrors of the situation would be added a civil war as bitter and relentless as that which reduced the country to a desert in the seventeenth century”

A similar, but less lethal, air of unreality prevailed in Southern Unionist circles. They wanted no partition, and no Home Rule.

The Convention was an attempt to reconcile these irreconcilables positions, and , given the unpromising  conditions, it made some progress.

It found a solution to the Land Question, that subsequently was enacted by the Free State government in the 1920’s.

A serious effort was made to agree some form of united Ireland. Ulster Unionists put forward a federal approach whereby an Ulster regional government would have substantial autonomy but within an all Ireland framework. Nationalists were not in favour of this. Nationalists suggested extra representation (appointed or elected) for Unionists in an all Ireland Parliament.  Unionists were not keen on this because they feared they would still be outvoted, particularly on the issue of tariffs.

Ulster industry wanted continued free trade with Britain, whereas nationalists want the power to impose customs duties on some British goods to protect Irish industries. This issue is arising again in the Brexit negotiations.  In effect Unionists wanted to be in a Customs Union with the UK, whereas Nationalists did not.

John Redmond was prepared to accept immediate Home Rule, without the power to levy customs duties, but his supporters were not and he had to back away from his proposal.

The Convention came close to agreeing a majority report with significant Nationalist and Unionist support, but this was stymied by the big German offensive of 1918 which led the UK government to propose imposing conscription in Ireland. This threat of conscription led to a crisis which destroyed any hope of agreement.

Looking back, the pity is that a Convention of this kind was not attempted in 1911, when Home Rule was first mooted. It might not have led to agreement but it might have contributed to a better understanding of the Ulster problem by all shades of Irish Nationalism.

 

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.

WHY IRELAND SEES THE EU DIFFERENTLY

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 IS GOING BEYOND THE REFERENDUM MANDATE

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 EU ALLOWS THE MAKING OF COMMON RULES….IT  ALSO ALLOWS THEM TO BE AMENDED, INTERPRETED AND ENFORCED, IN A CONSISTENT AND EFFICIENT WAY

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.

BREXIT NEGOTIATIONS WILL DIVERT TIME AND TALENT FROM MORE IMPORTANT MATTERS

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.

IRELAND’S IMPORTANT ROLE

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.

FISHERIES

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.

NORTHERN IRELAND

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.

WHY HAVING A COMMON COURT, AND CONSISTENT INTERPRETATION, CAN HELP

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.

THE DEFENCE OF EUROPE

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.

PROTECTING KEY SHARED  INFRASTRUCTURE FROM ATTACK

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.

BREXIT NEGOTIATORS NEED TO REMEMBER HOW MUCH WE HAVE IN COMMON

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.

NEXT STEPS FOR THE EU, NOW THAT THE UK IS LEAVING

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.

MORE COMMITTMENT WILL BRING MORE INFLUENCE

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.

BUT WHAT DOES EU PUBLIC OPINION WANT?

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.

ENERGY SECURITY

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 OUTCOME OF THE UK GENERAL ELECTION

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

 

TESTIMONY BY JOHN BRUTON,  AT THE SEANAD SPECIAL SELECT COMMITTEE ON THE UK’S WITHDRAWAL FROM THE EUROPEAN UNION

I welcome the opportunity to speak here today and commend the committee for its work.

If I may, I would also like to commend the government on the way they have ensured, through effective diplomacy, that the particular problems of Ireland have been publicly recognized in the negotiating positions of both the EU 27 and the UK.

I will go into some of the difficulties that will arise in the Brexit negotiation.

It is important to say that Brexit is a British initiative, for whose consequences Britain must take primary responsibility. It was not forced upon them. In fact, as I will show, numerous concessions have been made by its EU partners to keep the UK within the EU Treaties, which it freely adhered to in 1973, and which its people overwhelmingly endorsed by referendum in 1975.

The context of the Brexit negotiation is changing all the time. In recent weeks, the EU economy has been improving. Election results in the Netherlands and France are more positive than many feared. Even the Trump Administration is beginning to see value in doing business with the European Union. The EU has remained united in its response to Brexit, a matter for which the Irish government can also take some credit.

WHAT IS THE ALTERNATIVE TO A HARD BREXIT?

While I believe it may seem impossibly optimistic today, I believe conditions can be envisaged  in which, eventually, the UK voters might decide, either not to leave the EU at all, or to decide, after it has left, to rejoin.

Ireland should try to keep that possibility alive.

The terms for Brexit, as set out so far by Mrs May, will do incalculable damage to this island, politically, emotionally and economically.

We cannot simply wait for this to happen. While seeking to mitigate the effects of Mrs May chosen hard Brexit, we must also do everything we can to ensure either that, at the end of the day, there is no Brexit.

Apart from a few open questions, Theresa May has said what she wants. She wants out of the single market, out of the customs union, and “control” over immigration

The open questions she has avoided so far are about the financial terms of the divorce, the status of EU citizens living in the UK and vice versa, and two aspects of a future trade agreement (if there ever is one), namely arbitrating disputes, and  third country imports getting into the EU via the UK.

The Article 50 letter, sent to Donald Tusk, did not tell us much more about the UK negotiating position than the Lancaster House speech did, although it does not repeat the pledge to leave the Customs Union.

 How the EU will respond to Mrs May’s letter?

The European Council is meeting this week to agree the orientation it will give to the EU negotiators for the discussions with the UK, that will start formally in June, and in earnest after a new German government is formed in September.

These orientations will be agreed by consensus, so every EU head of government will have to be satisfied.  

 In working out the orientation to be given to the negotiators, a crucial thing will be  for the European Council  to have in mind  what would be it’s ” best alternative to a negotiated agreement” (BATNA).

It is important to have such an alternative ready, because there is every possibility that no agreement will be reached within the two year time frame for negotiation and ratification of a withdrawal agreement.

Mrs May has said that, for her , no deal at all  preferable  to a bad deal . Her BATNA, so to speak, is no deal at all.

“No deal” would mean the UK simply crashing out of the EU overnight, sometime before the end of March 2019.  This “no deal” scenario could lead to an overnight halt to flights, to trade and to commerce. There would be immediate, massive currency instability.

As pure negotiating tactics, maybe it not surprising that Mrs May would pretend that “no deal” would be better than what she would call a bad deal, but she is hardly serious.  

“No deal” is something the UK cannot really afford. This “no deal” scenario put forward by Mrs May will, I expect, be probed during the UK election campaign to discover what it actually means.

The fact that it was put forward, vindicates Tony Blair’s description of the UK government as, at the time of the Lancaster House speech, “not driving the (Brexit) bus”, but rather “being driven” by partisan and ideological forces it had not tried to control .  

The EU country that would be worst affected by the UK crashing out of the EU, with “no deal”, would, of course, be Ireland.

So Ireland must use all its imagination and ingenuity with its EU partners to ensure that there is a better alternative than “no deal” available, to what Mrs May might consider a “bad deal”..

SHOULD THE EU OFFER UK VOTERS ANOTHER OPTION?

If the UK government is unable or unwilling, because of domestic politics, to work out a responsible “best available alternative to a negotiated agreement”(BATNA), then the EU side should do so for it.  

It should adopt it, alongside its line by line response the UK’s negotiating demands

Having a BATNA would also strengthen the EU’s negotiating position. It would provide something with which an emerging deal could be compared. It would also provide a basis on which the UK electorate could reconsider its decision of 23 June 2016, if it ever wants to do that.

As Tony Blair said, UK voters have a” right to change their minds”. After all politicians are allowed to change their minds, so why not voters?

 If it was the UK voters who, in a referendum, sent their government on a mission towards Brexit, it would be reasonable that the same voters, rather than Parliament, should adjudicate on what will have been achieved (or not) by their delegates.

But if UK voters ever do change their minds about Brexit, it will happen slowly and incrementally.

Parts of the Brexit scenario, obscured during the Referendum, will become clearer during the negotiation. The unavoidable interconnections between EU freedoms, and EU rules, will emerge.  So that this happens, it will be in the EU side’s interest to ensure that there is maximum public understanding of the unfolding negotiation, at every stage.

Transparency will work in the EU’s interest.  A running commentary is exactly what is needed, in the interest of public education!  

When the UK public comes to see that the alternative to a single set of  EU rules, is either

no rules at all, or

multiple sets of contradictory rules for different jurisdictions,

citizens, in both the EU countries and the UK, may come see EU membership in a different and better light.

They may, for the first time in many cases, see the EU as something that actually simplifies their lives, rather than the reverse.

In my view, the “best available alternative to a negotiated agreement”,  the BATNA, that the EU side should adopt,  is an offer of continuing UK membership of the EU  broadly on the basis that the UK  was a member in 2015,  before David Cameron’s ill fated “renegotiation”.  

The terms obtaining then were generous to the UK. They allowed it to opt out of the euro, of Schengen, of Justice and Policing cooperation, of the Stability and Growth Pact, and of the justiciability in the UK of the European Convention.

Furthermore, the UK itself had also decided, without Brexit, that it would have a referendum of any new EU powers anyway.

In that sense, the UK was already having its cake, while eating it, before it ever decided on Brexit. These  pre 2015 terms should be left on the table by the EU side, but without the unjustifiable UK budget rebate.

President Tajani of the European Parliament made such an offer when he met the UK Prime Minister recently. That was a  very important initiative, and underlined how central the European Parliament will be in this whole process.

Of course, at this stage, the UK would reject such an offer out of hand.

 But, as the inevitable consequences of Brexit become clearer, UK public opinion might begin to see merit in it, particularly when it is compared with the costs of simply crashing out of the EU overnight, with no deal at all, which is supposedly  still Mrs May’s fall back  negotiating scenario, or as compared with what she calls a “bad deal”.

The resistance to keeping such an offer on the table is more likely to come from some existing EU member states.

Some members will point to the UK’s insatiable demands, when it was a member , for opt outs, rebates, and exceptions.  Arlene Foster’s analogy about feeding crocodiles may come to their minds. They will recall General de Gaulle’s original veto of UK membership, and his foresight that the UK would never settle in as a member. They might also argue that offering the UK a way back, after it has triggered Article 50, might encourage others to try it on too.  

 But if they sit back and think about it, they will, I believe, conclude that a UK that inside the EU, is better for the EU, than a UK outside it, even with a trade deal.

Keeping the offer of resumed UK membership on the table would be good politics, and good economics, for the EU.

I mention, in passing, that article 6.8 of the Vienna Convention, which sets out the law  on treaties generally, explicitly allows revocation of a notice of intention to withdraw from a treaty.

A political declaration by the EU heads of Government, at some stage in coming months, in favour of facilitating an eventual UK resumption of EU membership, on its  pre 2015 terms minus the budget rebate , would create a realistic yardstick against which the UK citizens could compare the terms of Brexit at the end of the negotiation.

THE EU NEGOTIATING POSITION

I do not propose to go into detail here about how the EU side should conduct the negotiation with the UK.

Obviously it will keep the 27 member states informed at every stage.

Ireland will need to ensure that  any deal guarantees that the UK will not engage in unfair or environmentally harmful trading practices, that there will be no unfair subsidization of UK enterprises competing with Irish enterprises, and to get  assurances that the EU will  take immediate action  if that happens.

We will have a special interest in the post 2020 agricultural policies of the UK, and in ensuring that they do not introduce production subsidies that disadvantage Irish exporters, that the UK adheres to reasonable climate change emission standards, and that it does not permit third country imports that undermine traditional Irish exports.

We will need to protect our electricity and energy supplies, after the UK has left the EU’s common energy policy. Ireland network in entangled with the UK one, and it is through the UK that we can access the rest of the EU network.

The EU has agreements on this with other countries, like Switzerland, which, though not EU members, contribute to the EU budget.

The EU will have difficulty offering the UK a better deal than it is giving to Switzerland on this or any other matter.

THE STATE OF BRITISH KNOWLEDGE OF THE EU, AND ITS IMPACT ON THE NEGOTIATIONS

It is important to remember that Westminster politicians have never taken much interest in how the EU actually works, in its procedures and rules, and in the compromises that underlie its very existence. They have this in common with many politicians in bigger European countries, who treat the EU as a sideshow to national politics.

So, even though the Conservative Party sponsored the idea of holding a Referendum on leaving the EU, it did not give much thought to what leaving the EU might actually mean in practice. In a sense, they are now finding out about how the EU works for the first time, just as they are leaving it!

Mrs May’s first priority, after the Referendum, was party unity.

That may be why she told the Conservative Party Conference last year that she would go beyond the mere terms of the Referendum.

She would not just leave the EU.  She would refuse to join the European Economic Area (unlike, non EU member, Norway).

She would also refuse to join the EU Customs Union (unlike, non EU member, Turkey).

She would reject the jurisdiction of the European Court of Justice.

This kept her party quiet.

But now come the actual negotiations. This is where Mrs May’s rhetoric at the Conservative Party Conference, meets the reality of a rules based international trading system.

A RULE BASED INTERNATIONAL TRADING SYSTEM REQUIRES A COMMON SYSTEM FOR MAKING, AMENDING, INTERPRETING, AND ENFORCING AGREED RULES

In a rules based international trading system, unpleasant compromises are essential if you are to persuade others are to open up their markets to your exporters, to your bankers, to your planes,  and to your people.

In a rules based international trading system, you cannot, unilaterally, make, amend, interpret, and enforce the agreed rules, in a way that suits only you.

There has to be a common system, which involves some concession of sovereignty.

You often also have to accept an external enforcer, like the European Commission or an International Court. This is a concession of sovereignty.

And you often have to accept an external body interpreting the meaning of the rules, someone like the European Court of Justice, or a Disputes Panel of the WTO. Another concession of sovereignty.

But this is unacceptable to those who have made national sovereignty into a religion. It is unacceptable to some of Mrs May’s Euro hostile MPs, and to some of the supporters of Donald Trump.

Some have argued that if Ireland is inside the EU, and the UK is out of it, a special “bespoke deal” for the island of Ireland, or for the UK and Ireland, could be envisaged.

I do not see how this could work as far as trading standards and tariffs are concerned.

The ECJ would be the final arbiter of Irish standards, while the UK Supreme Court would make the  final arbitrations as far as the UK and Northern Ireland standards would be concerned.

Ireland would be obliged to collect EU tariffs, and enforce EU standards, on any goods entering the EU through Ireland, and do so at the Irish border, unless we wanted to exclude ourselves from the EU Single market.

Any precedent established for the UK and Ireland in this matter will be examined by the countries in EFTA and the EEA. They will want to be sure that their existing deal is better than anything offered to the UK, which has refused to join either EFTA or the EEA. This will be especially the case if those countries are contributing to EU funds on an ongoing basis, and the UK is not doing so.

The EU side in the negotiations will also have to respect the long standing “Interlaken principles” of 1987 which say that, in negotiating privileged relations with non EU states, the EU will prioritize integration between its own members over relations with non members, and will safeguard its own decision making autonomy.

I think this reference to decision making autonomy may mean that EU rules and the ECJ must take precedence over the decisions of any joint bodies the EU might agree to set up with the UK.

SOME OF THE PRACTICAL PROBLEMS OF BREXIT

I have been reading publications of Conservative supporting think tanks, like the Bruges Group and “Leave means Leave”, and they are discovering how much extra bureaucracy will be involved in the UK decision to leave the EU Customs Union and the Single Market.

The UK will have to introduce Customs controls on the goods bought and sold between the UK and the EU. This will involve checking where the goods came from, if they are properly labelled, if they are safe, and if the tariffs due have been paid. The delays will be substantial, at the border in Ireland, at ports in the UK, ports in Ireland and ports on the continent.

Customs clearance alone will add 8% to the cost of goods arriving in the UK by sea from Ireland or the rest of the EU.

At the moment 90 million customs declarations have to be checked in the UK for goods arriving from outside the EU. Once the UK itself leaves the EU Customs Union, UK customs officials will have to check 390 million documents!

Some may think the UK could reduce these difficulties by being in the Customs Union for some goods, but not for others.

This is impossible under WTO rules. A Customs Union restricted to some countries is a departure from the WTO norm of non discriminatory trade policy among all WTO members. A Customs Union is allowed by the WTO only if it covers substantially all trade. The UK will be trying to join the WTO on its own account, and starting out attempting to break WTO rules may not be wise.

Even if the UK eventually decides to stay in the Customs Union, but leaves the Single Market, and  tariffs will  then not have to be collected at the border and in ports,  the origin of goods will still have to be checked, as will compliance with EU safety and labelling rules.  This will take a lot of time, whether it is done, at the border or in a depot, electronically or on paper. The cost of doing business will increase, and for no productive or constructive purpose.

By leaving the EU Customs Union,  the UK will not only exclude itself from duty free access to the EU market, which represents over 50% of UK trade, but it will also lose the benefit of Trade agreements the EU has negotiated with 60 other countries, which account for a further  17% of UK exports.

For example, since the EU negotiated a trade deal with Korea ten years ago, UK exports to that country increased by 110%. Leaving the EU means the UK  giving that up, temporarily, and, perhaps, permanently.

There may be opportunities for Ireland to replace some UK trade with Korea.

Japan has more investment in the UK than it has in the rest of the EU combined, but a lot of it is there so as to access the EU single market. Again this is an opportunity for Ireland.

Mrs May is also beginning to discover that her hard line on immigration will have costs. 20% of employees on UK farms, and 29% of employees in UK food processing plants are EU nationals, who will lose their right to live and work in the UK.  

When the UK tries to negotiate trade deals with countries outside the EU, like India, it will find that it will face demands for more Indian migration to the UK, as Commissioner Hogan pointed out earlier this week.

UK Airports will find themselves losing business, when the UK has to leave the EU Open Skies Agreement with the United States. More US transit traffic will be routed through Dublin.

The UK will also have to try to join the European Common Aviation Agreement, as a separate member, if UK owned airlines are to have the right to fly passengers between EU airports. Rival airlines will not make it easy for them to join.

A sudden “no deal” Brexit would leave the UK outside the EU’s Aircraft Safety Agency’s jurisdiction, without a ready replacement.

After Brexit, the UK will have to set up 34 new national regulatory bodies to do work now being done for the UK by the EU Agencies, from which the UK will have excluded itself, because these agencies come under the jurisdiction of the ECJ.

An example of this is Euratom, a body confined to EU members, which regulates nuclear safety.  Amending the Euratom Treaty will not be simple.

UK farmers and food producers will find themselves facing tariffs of 35% on dairy exports, 25% on confectionary, and 15% on cereals. UK lamb production will be hard hit. These tariffs will have to be collected at the border here, and in Irish ports trading with Britain, and this will be the direct result of a sovereign UK decision.

If Mrs May wants to be able to make deals to extricate herself from some of these bad outcomes, she will need much more negotiating flexibility.

A lot will depend on what the Conservative Manifesto says. If it repeats the promise of a low cap on immigration, then Mrs May have less negotiating flexibility at after the Election than before.

HOW TO MINIMISE THE DAMAGE BREXIT WILL DO

As I have said, even if the UK decides to stay the EU Customs Union after all, additional barriers to trade  will go up at the border in Ireland, and between Ireland and Britain.

Ireland must use every legal means available to prevent this damage, including making full use of all the institutions set up in the Good Friday Agreement to persuade the UK to  continue to adhere to EU standards within the UK, even after it has left the EU.

For example, if, after Brexit, the UK decides , as part of its agenda of “taking back control “ to develops new “British standards” for

  • packaging ,
  • plant safety,
  • pharmaceutical safety, or
  • food safety,

the disruption to North / South trade in Ireland, and to trade between Ireland and the UK, will be immense.

Even slight differences in standards can add hugely to costs, and can require expensive duplication of testing and production lines. This will be the case even if there are no tariffs. Similar regulatory barriers could arise for the provision of services sold between Ireland and the UK.

Increasingly, international trade agreements are in fact about standards rather than tariffs.

As the only EU country with a land border with the UK, keeping harmony between EU and UK standards, will be disproportionately important for Ireland.

Since 1973, both parts of the island have been bound by almost identical rules, made under similar European Communities Acts, covering each jurisdiction, under which both of us have implemented EU laws, which have been interpreted in a uniform way, by the European Court of Justice (ECJ).

All that may change on the day the UK leaves to EU.

The UK Prime Minister has announced that she will, later this year, introduce a “Great Repeal Bill”, to repeal the 1972 European Communities Act , under which EU laws automatically apply in the UK , and by which EU law has primacy over UK law.

The “Great Repeal Bill” would then come into full force on the day the UK actually leaves the EU.

This proposed “Repeal” Bill in misnamed because it will not actually repeal the EU laws, but simply declare that these same laws are now sovereign UK laws, independently of the EU, without altering a single comma.

But what happens after that?

DIVERGING STANDARDS COULD CREATE NEW TRADE BARRIERS

The Great Repeal Bill will  go on to  provide a mechanism whereby the UK can then quietly repeal, or amend, these EU laws, one by one, without reference to the EU.

This will be done by Ministerial orders, which cannot be amended, and are rarely even debated.  If these orders unilaterally change the standards to be met on the UK market, this could, overnight,  erect a new barrier to trade with Ireland and across the border here.

The same will happen if a UK Supreme Court decision interprets a rule the UK has inherited from the EU, in a manner that differs from the interpretation of the same rule by the ECJ. Overnight, we have a new trade barrier.

Of course, it will take many years for UK Ministers to go through every inherited EU directive and regulation, every amendment to them, and every court judgement interpreting them, and then to decide on which to keep, which to amend, and which to replace .

But all this will be done behind closed doors, under pressure from special interests.  All this could happen with no discussion with Ireland or with other EU countries. That is the logic of the Brexit rhetoric about “taking back control”

Theresa May has promised that this process will be subject to “full scrutiny and Parliamentary debate”, but this seems impractical because so many EU laws are involved. And the scrutiny and debate, if any, will be confined to Westminster.

She said nothing about scrutiny in the Parliament in Edinburgh, or in the Assemblies in Belfast or Cardiff, let alone any consultation with Dublin!   

This problem will get more and more severe as time goes on, as the UK seeks to justify its decision to leave the EU by introducing new rules and regulations of its own.

The British / Irish Intergovernmental Conference, set up under the Good Friday Agreement, must make this a permanent agenda item. It will have to meet much more often to keep up with the rapidly moving EU and UK regulatory agenda, to spot divergences that might create new trade barriers.  It will need a substantially enhanced secretariat, and as the initiator of Brexit, the UK government should come forward with concrete proposals on this.

Some of the laws being repatriated from the EU by the UK deal with matters that now fall within the competence of the devolved assemblies. These Assemblies will be able to make new rules of their own, which may differ from one another, which raises the theoretical possibility of new barriers to commerce within the UK itself.

The exact same former EU regulation could be interpreted in one way north of the Irish border, and in another south of the border.

AN IRELAND CLAUSE IN THE UK’S “GREAT REPEAL BILL” ?

What we can do to prevent all these disruptive and costly trends?

In my testimony in the House of Lords, I suggested that the proposed “Great Repeal Bill” contain a special “Ireland clause”.

This clause would require any UK Minister, or a devolved UK Assembly, which is contemplating making any unilateral UK amendment to an inherited “EU/UK” law, to give public notice of his intention to do so.

It should then be obliged formally to consult both the Irish Government, and the Northern Ireland Assembly on the matter.

Such an “Ireland clause”, should also provide for the monitoring of any divergences between the interpretations by the ECJ and by the UK courts, of the EU laws inherited by the UK.

In this way one could to identify anything that might cause a problem for any part of Ireland, or for Anglo Irish relations.  It would reinforce the work of the British Irish Intergovernmental Council, to which I referred earlier.

This would not avoid all the problems that will arise from Brexit, but it would should ensure that every step is taken with proper deliberation and foresight , and that further damage is not inflicted by accident .

THE GOOD FRIDAY AGREEMENT

There is another aspect of Brexit to which I must refer. That is its impact on the Good Friday Agreement.

The consent principle in the Good Friday Agreement said that the constitutional status of Northern Ireland, defined as its status as either part of the UK or part of a united Ireland, could not be altered without the consent of the people of Northern Ireland. That is not affected by Brexit.

But it is arguable that Brexit changes the constitutional status of Northern Ireland, in another sense, by taking it out of the EU.

This type of constitutional change was not envisaged at the time the Agreement was being negotiated, but,  if Brexit was on the cards then, I am sure the negotiators would have attempted to deal with matter.

Brexit will impact living standards in Northern Ireland. The CAP provides 60% of the cash income of Northern Ireland farmers. The 57% of all exports from Northern Ireland, which go to the EU, will suffer.

Strand Two of the Good Friday Agreement covers North/ South relations, and a strong North/ South dimension was important in ensuring the overall balance of the Agreement.

One of the key elements in Strand Two is the Special European Programmes Body, which helps spend EU monies on projects that promote closer North/ South relations.

When the UK takes Northern Ireland out of the EU, all that will change, and, in the absence of EU monies, Strand Two will lose an important part of its content.

The UK government, which is the initiator of Brexit, has to take responsibility for all these issues, and propose alternative ways forward, to strengthen both Strand Two and Strand Three of the Agreement.. This will require the continued use of the review procedures in the Good Friday and St Andrews Agreements, in light of Brexit, as it evolves. This is a matter your Committee will probably wish to explore

WHAT IRELAND SHOULD DO NOW

In making its preparations, Ireland should act on the assumption that the UK will leave both the customs union and the single market.  While we should work for the best, we should prepare for the worst.

In our efforts to get the best outcome, and indeed to help the UK, we will only get the support we deserve from the other EU states, if we show we are fully committed to keeping the EU together. We cannot allow a perception to develop that we are half hearted about preserving and strengthening the EU. As a member of the euro, we are necessarily in the EU for the long haul.

Acting on the assumption of a hard Brexit, Ireland should adopt an aggressive strategy to improve its overall competitiveness, in other words, improve its ability to survive the worst outcome.

To deal with a bad Brexit outcome, Ireland must become hyper competitive. The right action agenda is to be found in the “Competitiveness Challenge”, presented to the government by the National Competitiveness Council.

As the Report points out, we start from a good position.

Ireland has the 5th highest productivity in the OECD, after Luxembourg, Norway, the US and Belgium.

In the ease of doing business, Ireland is in 5th place in the EU after Denmark, Finland, Sweden and Germany.

We should now aim now at first, not fifth, place in both of those tables!

The Competitiveness Council shows where there is room for improvement.

Our immediate competitor in many areas will still be the UK .

Comparing Ireland with the UK, using the World Bank Rankings measures of ease of doing business , the Competitiveness Council Report  says that,  for a business wanting to

  • get electricity, Ireland is in 33rd place, while the UK is in 17th place in the world
  • get a Construction permit, Ireland is in 38th place, while the UK is in 17th place
  • enforce a contract, Ireland is in 90th place in the world, while the UK is in 31st place (our case clearance rate in our courts is the worst in the EU)
  • trade across borders, Ireland is in 27th place, while the UK is in 13th place
  • get Credit, Ireland is in 32nd place , while the UK is in 20th place.

The remedy to each of these problems is different. It will usually involve action by several government Departments. So a “whole government” approach will be needed, with a narrow focus on dramatically improving Ireland’s competitiveness position in every area where our costs of doing business are too high.

The Taoiseach, and his office, are in an ideal position to drive this, because he has unique authority to clear away road blocks caused by disputes between Departments.  Making Ireland hyper competitive, and able to withstand the hardest of hard Brexits, would provide a unifying agenda for the New Politics, going beyond the Programme for Partnership government, which after all agreed was when Brexit seemed unlikely.

In fairness, the figures quoted by the Competitiveness Council show that for registering property, Ireland is 41st place while the UK is in 47th place, and for ease of paying taxes, Ireland is in 5th place while the UK is in 10th place. But even there we can do better.

If our aim is to be hyper competitive, that must influence our policy on public sector pay claims. That aim strengthens the case for setting up a “Rainy Day Fund” to meet unexpected fiscal eventualities, and the case for a strong Independent Parliamentary Budget Office.

We should not spend today, what we are unsure we will actually earn tomorrow

As our population ages, and the retired population inevitably increases, we will not be able to afford any work disincentives in our tax and income support systems.

We cannot afford to have so many households where no one is working, an area where Ireland is apparently worse than any other EU country

Nor will we will not be able to afford to narrow our tax base, as some propose. In fact we should be broadening it.

The likelihood of a hard Brexit should be the signal for a comprehensive action plan to make the Irish economy hyper competitive, starting now, even before the UK starts negotiating its withdrawal terms.

 THE EU IS A FRAGILE, VOLUNTARY,  UNION THAT CAN ONLY WORK IF THERE IS GIVE, AS WELL AS TAKE.

Meanwhile Ireland must work to make the EU more effective, and more visibly democratic.

Ireland must help the EU shake off its pessimism. It must defend the EU from unfair criticism. But it must also come forward with ideas for the reform and improvement of the EU.

There is no denying that the Brexit decision was a blow to the EU and created a risk that the 27 EU countries will start pursuing national interests at the expense of the common EU interest. So far there is no sign of this, and Ireland can claim a lot of credit for that.

The 27 EU states need to act resolutely to strengthen EU wide democracy, to ensure respect for EU rules, and to show that the EU can do business efficiently with the rest of the world.

The European Union is not a monolith. It is a voluntary Union of 28 states, with no independent tax raising power.

It operates on the basis of rules, which its 28 members must freely respect. If they fail to do so, the EU ceases to mean anything.

These rules are made under the authority of the EU’s Treaties, which have been ratified by all member states, and the Treaties can only be amended, if all 28 states agree.

If unanimity is the rule, the more members the EU has, the harder it becomes, by a form of geometric progression, for the EU to amend its Treaties.

A CLUB THAT CANNOT AMEND ITS RULES WILL FOSSILIZE

A club that has no power to change it basic rules will eventually fossilize and die.

The EU’s 28 members are, in theory, sovereign equals, regardless of differences in population or wealth.  But voting weights do recognise differences in size, on all issues where unanimity is not required.

The EU makes trade deals on behalf of its members, using the extra bargaining power that its size gives it. But because it negotiates on behalf of 28 states, not just one, it can be harder for the EU to finalise a trade deal that it would be for one state, negotiating alone.

In the case of some Trade deals, it is sufficient for them to be ratified by the European Parliament alone. In others, all national parliaments, and some regional parliaments, must ratify too. In these cases, the EU has much more difficulty being an effective trade negotiator.

COMPROMISES BETWEEN NATIONAL INTERESTS NEEDED IF EU IS TO DO TRADE DEALS

Likewise, if it becomes too difficult for the EU to complete trade agreements, because a few states within the EU hold up the agreement in order to advance a national interest, then the EU’s utility as a trade negotiator will fade away.

This was an argument  advanced by some of  those who favoured Brexit, namely that the UK could negotiate its own deals more easily outside the EU, without having to wait for 27 other countries to agree.

The European Commission conceded, under pressure from national governments facing early elections, that the Trade deal with Canada had to be ratified by the national parliaments of the 28 states, as well as by European Parliament and the  28 governments.

This was a risky decision and may hamper the EU’s ability to do trade deals.

If the EU’s deal with Canada had  failed because the Walloon Parliament in Namur  failed  to ratify it, years of work by Canadian and EU negotiators would have gone down the drain.

Other countries would then begin to doubt if negotiating with the EU is worth their time. The Brexit advocates would have won part of their argument.

A lot more is at stake here than the content of the agreement with Canada.

TREATY CHANGE MUST ALSO BE POSSIBLE

It has become accepted wisdom in every EU capital now that EU Treaty change is off the agenda. This is because of

  • The requirement to have a referendum in Ireland on a Treaty change involving a transfer of sovereignty
  • the voluntary decisions of France and the Netherlands to have referenda on certain EU matters,  and in the Netherlands  even on a minor agreement with Ukraine.
  • the expectation that a Treaty change would be preceded by a cumbersome  Convention.

The net result of all of this is that the EU will not consider Treaty changes, even ones that might make it more democratic.

If that remains the case, the EU will eventually freeze up, because it will not be able to respond to new circumstances, and its member states will have to look to other less democratic or transparent institutions than the EU, to advance their collective interests. One could even see NATO being called into service for more broadly defined “security“ purposes.

I agree there is no need for a comprehensive review of the Treaties, so soon after the Lisbon Treaty came into force. But a Treaty change to respond to concerns that emerged in the UK referendum campaign, for example changes to make the EU more visibly democratic and accountable, should be possible.

For example, Treaty changes could be envisaged to

  1. Have  the President of the European Commission be elected directly, in a two round election, by the entire electorate of the EU.
  2. Have the President of the Euro group be similarly elected by  the Euro zone countries
  3. Give National Parliaments of the EU, if a minimum number agree, a power to require the Commission to put forward, for consideration, a legislative proposal within the EU competence in the Treaties. National Parliaments already can delay EU legislation, so why not allow them make a positive proposal?

 

RESPECT FOR RULES BY MEMBER STATES IS AN EXISTENTIAL NECESSITY

If one or more member states get into a habit of failing to respect EU rules or directives, the EU ceases to be operational, particularly if the states failing to respect the rules are the bigger ones.

Last year, France has threatened to flout an existing EU directive, because efforts to amend it, in a direction France wanted, are being blocked by the national parliaments of 11 EU states under the procedures introduced in the Lisbon Treaty.

In response the then French Prime Minister, Michel Valls,  threatened not to implement the  directive at all,  something which would completely undermine EU rulemaking.

He  said

“If it is not possible to convince ( the 11 states to accept the amendments France wanted) … France will not apply this directive.”

That is a direct threat to the EU from a founding state. It is really dangerous and should not be countenanced.

 

Ireland Has The Most Progressive Income Tax System In The EU

This note examines the latest OECD data (Taxing Wages 2017) on the progressivity1 of the Irish income tax system in comparison with other OECD countries. It finds that according to OECD measures the Irish system is the most progressive and that taxes in Ireland are relatively low on those with average incomes and below.

Income Tax

Ireland has the most progressive income tax system (including employee social insurance contributions) in the EU. The tax paid by a single person on two-thirds average earnings(average earnings are just under €35,600) is the fifth lowest in the OECD (out of 35 countries) after Mexico, Chile, Korea and Israel. If raised to Danish or German levels, a single person in Ireland would pay over €5,000 more in tax on an income of about €24,000.

The tax paid by a single person on average earnings is the 28th highest in the OECD. A single worker on an average income pays about €14,500 in income tax and social insurance contributions in Belgium compared to over €6,830 in Ireland a difference of over €7,650.

The tax paid by a single person on one and two-thirds average earnings (€59,400) pays €18,660 in tax which is slightly above the OECD average. A person at the same income level in Belgium would pay €28,800 in tax- just over €10,000 more.

A major reason for the relatively low direct tax burden in Ireland is that PRSI is lower here. In many higher tax countries PRSI funds pay-related unemployment, pension and health benefits while the Irish system provides flat-rate benefits only. Irish employees (and their employers) have to fund supplementary pensions separately. For example, Irish employees pay about €2 billion (after tax relief) towards their pensions annually. In many higher tax countries, these are funded through the tax system.

If we look at the tax payable (excluding PRSI), the tax paid by a single person on one and two-thirds average earnings is the 10th highest in the OECD .

Marginal Tax Rates

How do marginal tax rates in Ireland compare with other countries ? For a single person on two-thirds average earnings, the marginal rate in Ireland is 29.5 per cent compared with an OECD average of 32.1 per cent. The UK rate is 32 per cent. We are the 20th highest in the OECD at this level of income where rates range up to 54.6 per cent found in Belgium.

At average earnings a single person in Ireland faces a marginal tax rate of 49.5 per cent: the third highest in the OECD (average 36.2 per cent). Again Belgium is the highest at 55.9 per cent while the UK rate is 32 per cent.

At one and two thirds average earnings, the marginal rate of tax in Ireland (49.5 per cent) is the 9th highest in the OECD and above the OECD average of 43.4 per cent. Sweden is highest at just over 60 per cent and the UK is at 42 per cent.

Conclusion

Compared to other OECD countries

  • The level of direct tax paid in Ireland is low particularly for those below average earnings
  • Employee PRSI in Ireland is less than half the OECD average2
  • The Irish system is the most progressive in the EU
  • The top marginal rate is not particularly high but it applies at a relatively low level of income

 

Source: Taxing Wages 2017, OECD 2017

________________________________

Notes:

1 The measure of the progressivity of the tax system is obtained by comparing the tax due by a single person on 67% of average income with that payable on 167% of average income. Tax includes income tax, universal social charge and employee social security contributions.

2 In many higher tax countries PRSI attracts pay-related unemployment, pension and health benefits while the Irish system provides flat-rate benefits only

 

 

 

TEARING UP 40 YEARS OF COMMON RULE MAKING…..THE MEANING OF THERESA MAY’S SPEECH

Once Theresa May said ,at her party Conference in Birmingham in October, that she was insisting on immigration controls, on rejecting the jurisdiction of the ECJ, and on making trade deals with non EU countries, a hard Brexit became inevitable.

MAY SAYS SHE WANTS A STRONG EU

She said in her recent speech that she wants the European Union to be strong and successful, without the UK.

It was important that she say that. It set a good tone and it differentiates her position from that of Donald Trump, who, like Vladimir Putin, wants the EU to break up.

Mrs May says she wants the EU to stay together, but for that to happen, there can be no question of a country, including her own, being offered better terms by the EU, for leaving the EU, than it would obtain if it stayed in the EU.

That is not “punishing” anybody, it is common sense.

Mrs May set out her goals, but not all the pitfalls on the way.

FINAL DEAL WILL HAVE TO BE RATIFIED BY THE PARLIAMENTS OF ALL EU STATES

The eventual Free Trade agreement she wants with EU will not be finalised in Brussels. It will have to be approved by the 27 or more Parliaments within the EU.  The difficulties Ukraine and Canada have had getting their Agreements approved show how unpredictable that may be. Convincing Michel Barnier to agree may be the least of the UK’s negotiating problems!

She said that, on leaving the EU, the UK will retain all the  then existing EU rules for goods and services, but will then change them, as necessary afterwards. This implies a gradual hardening of the border in Ireland, as UK standards begin to diverge from EU standards.

MORE BUREAUCRACY INEVITABLE

To the extent that the UK diverges from EU standards, the UK businesses will have to apply two sets of standards, one for the UK market, and another for the 45% of UK exports that go to the EU. More paperwork, not less!

Once the UK has left the EU, goods coming  into the EU (including into Ireland) from the UK will be subject to checking under “Rules of Origin” requirements, in other words to check that they do not contain an undue amount of content that is not from the UK at all, but from elsewhere.

For example, there will have to be checks that UK beef burgers do not contain Brazilian beef.  These “Rules of Origin” checks will involve a lot of delays, and yet more bureaucracy, which will be especially onerous for small firms.

One study estimated that the need to apply “Rules of Origin” checks could reduce trade volumes by 9%.

PROBLEMS FOR RETAILERS

The UK decision to leave the Customs Union will create big problems for the Irish retail trade. Many retail chains treat Ireland as an extension of the UK retail market and have built their distribution chains, the network of warehouses, and their logistics on that basis.

Now transiting goods destined for Ireland through the UK, or from Ireland via the UK to continental Europe, will become much more complex. Customs inspections, paperwork and even road use costs may arise. These problems could be mitigated by new customs agreements, but this will not be easy. These problems will be particularly acute for food products, which are perishable.

New ways of getting goods in and out of Ireland, avoiding the UK , may have to be devised. Ireland will need to redirect its transport infrastructure towards the continent and away from UK routes which will require investment in new infrastructure at ports like Rosslare and Cork.

HALF IN, AND HALF OUT, OF THE CUSTOMS UNION?

Theresa May was remarkably unclear about the sort of relationship she wants with the EU Customs Union. She wants bits of it, but not all of it.

In attempting this unusual feat, she will run into difficulties with the World Trade Organisation (WTO), a body of which the UK now wants to become a fully independent member.

The WTO works on the basis of non discrimination, or the so called “Most Favoured Nation” principle.

As I understand it, any concessions that the EU Customs Union grants to the UK, as a non EU member, would have to be extended to all the EU Customs Union’s trading partners, unless the concessions cover “substantially all” trade between the UK and the Customs Union.  If this is so, Theresa May’s formula will be unworkable. The UK will have to be either ” substantially in”, or “substantially out”, of the Customs Union.

Any concessions the UK might get to allow it to be partially in, or partially out, of the EU Customs Union for a given product or service, will have to be purchased at a price from the EU and from the other members of the WTO.  The whole process will be dragged out by other countries seeking an advantage in an apparently unrelated field.

It will drag on, and on.

HOW IRELAND SHOULD APPROACH THE BREXIT NEGOTIATIONS, WHEN THEY START

Theresa May’s commitment to the Common Travel Area (CTA) with Ireland is welcome, but the CTA is an understanding rather than an enforceable legal agreement. The extent to which it gives legally enforceable right to work in either jurisdiction will be tested in the negotiations. Spain will seek similar rights for Spanish workers working in Gibraltar.

How should Ireland approach the negotiation of UK exit from the EU?

Obviously, Ireland has more to lose in this than any other EU country.

But Ireland needs to be clear in its own mind that it is in the EU, and intends to stay there.

Ireland has  prospered in the EU, in a way it  did not prosper before it  joined and when it was dependent on the British market. Ireland has prospered thanks to foreign investment, which came to Ireland on the explicit assurance that Ireland would remain in the EU and that firms located in Ireland  would have full access to the EU single market.

Incidentally, the UK also did better economically in the 43 years since it joined the EU, than it did in the period before it did so.

There has been a lot of abstract commentary in the Irish media about the stance Ireland should take in the Brexit negotiations. Some have suggested that Ireland detach itself from the common EU negotiating stance. This would be a big mistake, because in trade negotiations size matters.

While the negotiations will be conducted by the European Commission, they will be intensely scrutinised at every meeting of the European Council, where Ireland will be represented by the Taoiseach. No move will be made without intense Irish involvement on the EU side.

Irish Embassies in every EU capital will be vigilant. Ireland will need to deepen its understanding of the fears and hopes of every one of its 26 EU partners, understand their history, and speak their languages. It is by framing Ireland’s goals in terms that the  other 26 can see is in their interests too, that Ireland will maximise its success in the Brexit negotiations.

As Brexit is a British initiative, it is proper that, as the first step, Britain should accompany its application to leave the EU, with a detailed prospectus setting out how its proposed relationship with the Customs Union might work, specifying how its proposals might be reconciled with WTO rules.

It is better that the UK identify any legal, practical , and logistical  difficulties, for itself and by itself.

In that way, it will own the problem, and own the solution.

It is not for the EU to tell the UK what to do, because that would just allow the UK to blame Brussels for the bad news, and blame others for problems that are INHERENT in what the UK itself is now looking for.

IN ANY NEGOTIATION, SIZE MATTERS

Of course, Ireland can continue to work with the UK on common problems. To the extent that bilateral discussions with the UK can smooth the overall path of the wider negotiations,  that would be welcomed by Ireland’s EU partners.

But Ireland would have to be entirely transparent with its EU partners in regard to any discussions it might have with the UK, on any subject that was part of the overall EU/ UK negotiations. That is vital.

On issues of importance to Ireland, the extra leverage Ireland will have, as a member of the EU team, will help Ireland get a much better deal than it could ever get, as a smaller country negotiating on its own, with a much bigger UK.

In any negotiation, size matters!

IRELAND MUST BECOME HYPER COMPETITIVE

Now that it is clear that we have to prepare for a hard Brexit, Ireland should adopt an aggressive strategy to improve its overall competitiveness.

That is how we will attract new business to Ireland, and withstand the destructive currency gyrations that unfortunately will be part of the Brexit process.

Ireland must become hyper competitive. The right action agenda for the government is to be found in the “Competitiveness Challenge”, presented to the government last month by the National Competitiveness Council.

In his foreword to the Report, the Taoiseach said “We need to continue our effort to control and reduce costs-whether for property, legal services, finance or energy”

As the Report points out, Ireland has the 5th highest productivity in the OECD, after Luxembourg, Norway, the US and Belgium. To overcome Brexit, we should aim now at first, not fifth, place on this table!

When the UK leaves the EU, we will still be competing with them, and they will be freed of the discipline of   EU state aid rules, and thus able, if they wish, to compete unfairly with us. Comparing Ireland with the UK, on the World Bank Rankings, the Competitiveness Council Report  says that,  for a business wanting to

+  get electricity, Ireland is in 33rd place, while the UK is in 17th place in the world

+  get a Construction permit, Ireland is in 38th place, while the UK is in 17th place

+  enforce a contract, Ireland is in 90th place in the world, while the UK is in 31st place (our case clearance rate in our courts is the worst in the EU)

+  trade across borders, Ireland is in 27th place, while the UK is in 13th place

+   get Credit, Ireland is in 32nd place , while the UK is in 20th place.

The remedy to each of these problems is different. It will usually involve action by several government Departments. So a “whole government” approach will be needed, with a narrow focus on dramatically improving Ireland’s competitiveness position in every area where our costs of doing business are too high.

The Taoiseach, and his office, are in an ideal position to drive this because he has unique authority to clear away road blocks caused by disputes between Departments.

PAY AND TAX POLICY MUST TAKE HARD BREXIT INTO ACCOUNT

 Making Ireland hyper competitive, so as to withstand a  hard Brexit, would provide a unifying agenda for the New Politics, going beyond the Programme for Partnership government, which after all agreed when Brexit  seemed unlikely.

If the national aim is to be hyper competitive, that must influence public sector pay claims. It strengthens the case for setting up a “Rainy Day Fund” to meet unexpected fiscal eventualities, and the case for a strong Independent Parliamentary Budget Office. We will not be able to afford to narrow our tax base. We should not spend today, what we are unsure we will actually earn tomorrow!

We will not be able to afford any work disincentives in our tax and income support systems, nor to have so many households where no one is working, an area where Ireland is worse than any other EU country.

The clarity we now have from Theresa May’s speech about the direction Brexit will take, is the signal we needed for a comprehensive plan to make the Irish economy hyper competitive, starting now, even before the UK writes its Article 50 letter.

 

NATIONALISM AND PERIPHERALITY…..TWO PROSPECTIVE LEGACIES OF BREXIT

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.

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