OBSERVER: When one considers the European Union, the key issue for the Republic is a simple one. Do we want to be in or out?

Fundamental issues about how Europe is run and how it relates to its people will be dealt with over the next two years in the Convention on Europe, which starts next year. The convention will give citizens of the Republic and every other EU state the widest possible opportunity to decide how the EU should work in future.

More immediately, there are more workaday issues to be dealt with. That was what the Nice Treaty was about. It made modest reforms and technical changes to EU institutions to make it possible for the community to enlarge.

It appears that the Republic will have another opportunity to reconsider this issue of enlargement in a 2002 referendum. This will be the Republic's opportunity to give a final view on enlargement. It will not, however, be our final view on the more fundamental issues of how the EU should be run.

Last November, the European Commission published its latest progress report on EU enlargement. The report reflected tremendous progress made by the candidate countries as they prepare for accession. For the first time, we have a clear indication that 10 of the 12 accession countries should be ready to participate fully in the EU by 2004.

Is the EU ready for a "big bang" enlargement process like this? This question places the focus squarely on the Republic as other EU countries complete their process for ratifying the Nice Treaty. Our failure to do so this year may delay or postpone the process of enlargement for some or all of these countries.

The 12 candidate countries will expand the internal market to almost 500 million consumers, making Europe the largest developed market in the world. By way of comparison, the US population is just over half that size. In addition, the euro zone will be strengthened when the new member-states come on board.

Without doubt, the Republic's membership of the EU has fundamentally assisted the growth and development of our economy.

It is difficult to see how an isolated economy, with a market of just 3.7 million people, could sustain the employment of 1.7 million or how, in isolation, we could be attractive to foreign direct investment.

Currently, our trade with the other EU member-states is worth more than €67 billion (£52.7 billion): this trade means real jobs in our economy and our communities.

Our trade with countries that are candidates for EU membership has also grown exponentially from 1993, to current levels of more than €2 billion.

In the context of EU enlargement, our trade with these countries has tremendous potential for growth.

With economic growth rates exceeding that of the existing EU 15, any fears that the EU may be burdening itself with economic liabilities are not well founded.

Our recent economic success has given us tremendous confidence, but this should not mislead us into being complacent. We have not achieved this progress alone, nor could we have done so on an isolated basis. Our participation in the EU has significantly contributed to our economic prosperity.

Much of our foreign direct investment has located in the Republic in order to access the larger EU market and because of our membership of the euro zone. We have benefited in many ways from all of this, not least from the significant employment dividend.

Our political representatives have done a good job in promoting and representing the Republic's best interests and participating forcefully in the EU - often ensuring that we punched well above our weight.

Our strength in global negotiations has also been enhanced beyond all recognition by our EU membership. Imagine and compare the voice of the Republic struggling on its own to make itself heard to the impact we have made as part of the broad EU group - supported largely, it should be added, by the candidate states - in the recent difficult WTO negotiations.

The EU is not perfect and no one should try to suggest that it is. If the EU institutions are to expedite the business of an enlarged EU, they must be reformed from the current structures, which were established for a much smaller union. Once you are part of a club, you won't always like all aspects of what is entailed.

However, there is a strong argument to suggest that we can best address these challenges by being an active and vocal participant, fully committed to the overall EU project, rather than by distancing, and ultimately excluding ourselves from having an influence in resolving issues of importance.

Maria Cronin is IBEC's director of EU affairs and IBEC's representative to the National Forum on Europe