Since the Brexit referendum in June I have been rapporteur of a Private Study Group of Irish economists and constitutional lawyers who have been examining what we should do when and if the UK leaves the EU. In August their report was sent to the Taoiseach, his Ministers and the Secretary-Generals of all Government Departments. It has been sent also to the EU embassies in Dublin, to UK Prime Minister Theresa May, her key Ministers and senior civil servants concerned with Brexit, and to a wide range of British Brexiteers whom my colleagues and I have got to know over the years.
The report’s basic conclusion is that it is in the interest of the Irish people that Brexit should be accompanied by “Irexit” – Ireland exit. We applied to join the then EEC in 1961 because Britain and Northern Ireland did so. We joined simultaneously with the UK and Denmark in January 1973. Now that Britain and the North are leaving, we should do the same, for three principal reasons.
The first is that Ireland is nowadays a loser, not a gainer, from EU membership. In 2014 we became a net contributor to the EU Budget for the first time, paying in €1.69bn and receiving €1.52bn. This means that in future any EU moneys that come to the Republic under the CAP, EU cohesion funds, research grants, support for community groups and the like, will be Irish taxpayers’ money coming back, employing some Brussels bureaucrats on the way.
Henceforth the EU will no longer be the ‘cash cow’ most Irish people have regarded it as for decades, and which is the basis of much of our official and unofficial europhilia. A bonus would be that outside the EU Ireland can take back control of its sea-fishing waters. Eurostat’s estimates of the value of fish catches by non-Irish boats in Irish waters since 1973 are a many-times multiple of the EU cash we got over that time.
The second reason why Irexit should go along with Brexit is that that is the only way of preventing the North-South border within Ireland becoming an EU external frontier, with new dimensions added to Partition, affecting trade, travel and different EU laws and legal standards as between Dublin and Belfast.
For example without the UK as an EU Member alongside it, the Republic would be in a much weaker position to withstand pressure to adopt continental norms in EU crime and justice policy, which differ signi cantly from Anglo-Saxon ones in such areas as trial by jury, the presumption of innocence and habeas corpus. Such divergence would adversely affect good relations within Ireland as a whole and while it would not undermine the Peace Process, it would not help it either.
If we stay in the EU while the UK leaves it would mean that for Irish reunification to come about at some future date the people of the North would have to rejoin an EU that Britain had long left, adopt the euro-currency, take on board a share of the €64bn of private bank debt which the ECB insisted that Irish taxpayers nance during the 2008-2010 currency crisis, and implement the further integration measures that are likely to be needed over the coming years if the Eurozone is to be held together. It would give 26 EU Governments in addition to the UK and the Republic a veto on eventual Irish reunification. Such a development should be unacceptable to all Irish nationalists.
Another consideration is that if the South remains in the EU while the North leaves along with Britain, future Irish reunification would make the whole of Ireland part of an EU military bloc that is likely to come under greater Franco- German hegemony following Brexit. That potentially could be a security threat to Britain. This will surely change significantly the calculus of British State interest and give Britain a strategic reason for keeping the North inside the UK, an interest it has not got today.
The third reason why most Irish people should now reassess their attitude to the EU is that the business case for Ireland remaining an EU member diminishes significantly if the UK leaves. Most foreign investment that comes here is geared to exporting to English-speaking markets, primarily the UK and USA, rather than to continental EU ones. Once the UK leaves the EU two-thirds of Irish exports will be going to countries that are outside it, as they are going today to countries outside the Eurozone, and three-quarters of our imports will be coming from outside. Outside also, Ireland’s 12.5% corporation tax rate would no longer be under EU threat.
Of course our relations with the UK and the EU in the Brexit context are complicated by our membership of the Eurozone. Irish policy-makers abolished the national currency and joined the Eurozone in 1999 on the assumption that the UK would do so also and that by going first they would show how communautaire they were. It was an utterly irresponsible action in view of the fact that the Republic does most of its trade with countries that do not use the euro.
With the pound sterling falling against the euro as the UK disengages from the EU, Ireland desperately needs an Irish pound that can fall with it, so maintaining its competitiveness in its principal export markets – the UK and America. That is why the Irish State urgently needs to get its own currency back. Economist Chris Johns noted in the Irish Times on 20 August that if the Irish pound existed today it would be worth some 10 percent more than the pound sterling.
This was the level it reached in January 1994, when Irish industry was in crisis because of its overvalued exchange rate – explicitly then, implicitly today. That in turn precipitated the major devaluation which inaugurated our ‘Celtic Tiger’ years. Ireland needs to regain the freedom of being able to determine its own exchange rate.
There is no legal way to leave the Eurozone and not leave the EU. This will almost certainly happen in due course over some long weekend when the Irish banks are closed and a new Irish currency is issued, or euros are temporarily over-printed as Irish pounds, which will then devalue. The Government if it is wise will now start concerting such a move confidentially with Germany.
A planned-for changeover from the euro is better than having to do that in the middle of the next euro crisis. Because of the closeness of Anglo-Irish relations and the fact that the Republic – unlike all other Eurozone members – does most of its trade outside rather than inside the Eurozone, Ireland is probably the only one of its nineteen Members whose departure should not in principle cause a general crisis for the euro-currency as a whole. An attraction for Germany is that without Britain and Ireland as EU members, it would more easily dominate the remaining EU/Eurozone.
”When the facts change I change my mind. What do you do, Sir?”, asked John Maynard Keynes. Ireland’s europhiles should now follow Keynes. Ireland leaving the EU alongside the UK would not be apocalypse. It would just mean the Republic returning to being a normal modern State, making all its own laws democratically in a parliament elected by its own people and responsible solely to them, controlling its own resources, using its own currency for its own people’s benefit and deciding independently its international relations. Would that not be a move towards the “unfettered control of Irish destinies” which was after all what the 1916 Easter Rising was all about?
Anthony Coughlan is Associate Professor Emer- itus in Social Policy at Trinity College Dublin