Irexit – To Stay, Or Not To Stay

 
 

Eve Ryan explores the argument of an Irish Exit from the EU.

 

The Brexit landscape has earned long-standing Irish euro-sceptics new allies. The argument against EU membership is no longer confined to issues of political ideology but has transcended to concerns of economic pragmatism. A new London Think Tank has recommended an Irish exit from the EU, as have economist and Professor of Financial and Health Services Ray Kinsella and former Irish ambassador Ray Basset to name a few.

The political elite has repeatedly stated its commitment to remaining within the EU, and mainstream media has echoed this sentiment. Their position is unwavering. What is less clear is the reasons behind this steadfastness. The arguments proffered for remaining are alarmingly unconvincing and fail to answer the concerns of euro-sceptics. It is necessary, now more than ever to re-examine Ireland’s position in the harsh light of the post-Brexit terrain.

The interests of the EU have become synonymous with Franco-German interests, which diverge significantly from Irish concerns.

Arguments to remain are illuminated by nostalgia for the romantic ideals of peace, democracy, and cooperation as espoused in the infancy of what is now known as the European Union. 80% of EU law is decided by qualified majority voting, meaning agreement of 55% of Member States representing 65% of the EU population. Under this system, Ireland represents 1% of the vote. The interests of the EU have become synonymous with Franco-German interests, which diverge significantly from Irish concerns. Ireland, having aligned itself with the UK on many issues, has tailgated on the UK vote. Post-Brexit, Ireland is left, as Professor Ray Kinsella in the Irish Times describes, “marginalised, peripheral and dependant.”

It cannot be denied that EU membership has done wonderful things for Ireland and its economy; its workplace directives have accelerated workers’ and womens’ rights. It revitalised agriculture through the Common Agricultural Policy (CAP) and has injected billions into the Irish economy. It did these things, but it is now not doing these things, and based on the political machinations of Juncker and Macron, it is doubtful the EU will act in our interest again. The facts have changed; hence our opinions must change, and we cannot allow the triumphs of the past to blind us to the failures of the present.

The markets of Canada, the USA and the UK collectively amount to 425 million versus an EU post-Brexit market of 435 million

The call to leave an open market of 500 million potential customers does not seem an economically sage move. Trade with the UK takes up a high proportion of all Irish trade with the EU. Post-Brexit, 66% of Ireland’s world trade will occur outside of the EU. The influx of foreign direct investment (FDI) in Ireland is commonly attributed to our ability to access the EU common market. While there is an element of truth in this assertion, FDI in Ireland is primarily concerned with exporting to English speaking markets such as the USA and the UK. The markets of Canada, the USA and the UK collectively amount to 425 million versus an EU post-Brexit market of 435 million; the former represents a marketplace more in line with the customer base at which Irish exports traditionally target.

Access to the European market is, of course, important. However, we should not be held hostage by the assumption that our economy relies on Europe to stay afloat. If anything, the mounting desire to harmonise corporate tax rates and bases across the EU poses a threat to our economy. As Wolfgang Munchau described in The Financial Times, the Irish business model based on low corporation tax is not sustainable in the EU. Ireland’s economy is buoyed up by FDI. It faces a choice: find a new business model to enable continued competitiveness in the EU market or capitulate. The question arises as to how Ireland, given its labour market, natural resources, and infrastructure can somehow cultivate a new domestic industry to rival the long-established industrial capitals of Europe.

The challenge of devising a new currency has also been cited as a disincentive to leave.

The challenge of devising a new currency has also been cited as a disincentive to leave. Conversely, we should view this as an opportunity. As the pound falls, how is Ireland to compete in the English-speaking export markets with which it does almost 66% of its trade without control over its monetary policy? As stated, FDI is directed at English speaking markets, declining competitiveness in these markets is undoubtedly a more significant threat to the attractiveness of Irish FDI than an EU exit.

This article does not seek to promote an exit from the EU. Instead, it calls for better reasons to remain. The debacle of Brexit is characterised by its lack of a plan as to what a UK outside of the EU would look like. Ireland has the opportunity to make such a plan, only then can Irexit be duly considered. We must inform ourselves as to what the EU is, what powers it has, what powers Ireland has, and the attainable relationship with the UK and EU. We must seek unbiased answers to these questions, eschew the common but often untrue rhetoric and look to reality. For only then can we make a truly informed decision as to our fate, and only then can democracy prevail.

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