Irish economic `miracle' attributed to Europe

Boston or Berlin, the US or the EU - which, the Tanaiste, Ms Harney, asked recently, is our natural home?

Boston or Berlin, the US or the EU - which, the Tanaiste, Ms Harney, asked recently, is our natural home?

For the EU Commission President, Mr Romano Prodi, there is no doubt where Ireland's interests lie, or who is responsible for what he described as the Irish economic "miracle" - Europe. So he asserted in an interview with The Irish Times yesterday. And he expressed bewilderment that Irish politicians should even be asking themselves the question.

"Outside Europe, you have nothing. What would you be outside Europe?" he asks.

"But you are not grateful for that. It's the first time in history that your country has become an immigrant country. In 20 years you made a revolution that you have not done in four or five centuries.

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"And yet you don't acknowledge that this fantastic change has come about because of Europe. And you didn't lose your sovereignty. You are Irish. Terribly Irish.

"Why don't you go to Boston and you'll see how your economic condition would be?" he asks rhetorically. "You have made a fantastic choice and you have got good results . . . If you are not happy, fine. Happiness is not an obligation.

"I think that being in Europe has been the great event of your history," he says, adding mischievously, "but why don't you try an alternative?"

His spokeswoman coughed.

"The President is not advocating that Ireland should leave the EU," she added helpfully.

But although the Commission President has no such intention, he clearly has been waiting for the opportunity to let fly his good-humoured tirade against a debate in Ireland that has not gone unnoticed in the Commission.

Mr Prodi sees this week's Nice summit as crucial to enlargement but is sanguine about the reality that Europe is evolving slowly. Not everything will be completed at Nice.

He finds the Irish and British refusal to consider even the most minor move to majority voting on taxation frustrating and asks for the Commission's proposals to be taken at face value, in good faith, no more, with no hidden agenda.

"Our proposals are our proposals. Take them one by one. We deal with fraud. We deal with double taxation. We deal with technical aspects of the VAT regime which needs updating. If you list our proposals on taxation they are really simply technical adaptations necessary to make the single market work.

"I've been very careful not to propose any changes on personal taxation or corporate taxation."

Even if he wished to go further later the proposals on the table would not facilitate such a move, he insists. "Yet the Irish are interested in double taxation and . . . the fight against fraud."

"My motto the day I arrived was very simple - if a country wants to have lower taxation and expensive hospitals, or higher taxation and free hospitals, why not? Or free school, why not? I'm not bothered."

As an economist does he recognise the value of tax competition? "Yes. You have tax competition inside the United States. But what I want to ensure is that you don't use it to destroy the single market."

Does he understand the vehemence of the opposition? "I think it's the old problem. I did it when I was prime minister . . ." Governments find it easy to criticise Brussels and are then impaled on their own words," he argues. Reintroducing complexity to the argument "is not an easy political exercise. I really understand it."

But on the Irish insistence that each member-state should retain a commissioner, he is more sympathetic. "This issue is the only one on which the Commission did not take one view on one side, because we understand that the most important aspect is not the physical number of commissioners but how you organise the Commission and give powers to the President.

"But I do understand that for many countries, especially for the new countries, not only Ireland, a commissioner is the symbol of belonging to Europe. In this historical phase it is difficult to conceive any country from Germany to Luxembourg without a commissioner.

In the longer term, he believes that rotation of entitlement to a commissioner is feasible.

He rejects fears that the proposals to allow groups of member-states to proceed more easily on their own with projects inside the EU framework, known as "reinforced co-operation", will lead to the emergence of a two-tier EU. With fair rules and a requirement to be accessible to all, reinforced co-operation "is then by definition an open room and not a closed shop.

"I am also convinced that in reinforced co-operation there will be strong participation by the new member-states because . . . so I don't think it will be the old six [the original EC member-states] against the others.

"I also think it will be different case by case. In some cases it will almost coincide with the euro members, where you will probably find Ireland in and Britain out. There are other cases, say Schengen-type agreements, in which you will find both Ireland and Britain out. Others, like security, where you may have Britain in and Ireland out."

He insists the Commission can play a crucial role in protecting the interests of the EU as a whole as "a referee with a whistle".

He rejects any suggestion that such provisions in the defence and security field represent a threat to Irish neutrality. "Of course you have to respect neutrality . . . I respect neutrality. Why not? You are neutral because of history," he says, adding with a laugh, "There is no one so Western and yet so neutral as Ireland. A strange mixture but it's so."

That Nice will not conclude the debate on EU integration is clear. He hopes the summit or the Swedish presidency after it will provide a "road map" for a discussion on such issues as a constitution for the EU or a definition of the relative competences of the EU and of member-states, which will probably take three or four years.

And a new means of conducting such a debate will be needed. "We must find a method which is more efficient than an IGC, but at the end of the decision-making process the decision has still to be taken by the member-states. I don't say no IGC but a better organised IGC."

He argues that the BSE crisis, a crucial test for the Union, illustrates how people understand clearly that some things simply have to be done at Union level. A clarification of competences would help to reduce the gap between citizens and the Union by introducing certainty.

And if the EU fails to convince that it can act effectively? "The people will suffer more, simply that. Because, at the end of the story, this is irresistible . . . Otherwise we disappear from the world map. Even Germany has no hope of having a decisive say in the world.

"Think of China. When you go to Shanghai you see the scale of the world. Can you conceive then that the voice of a single European country on its own can be heard? I don't think so."

He compares Europe's place without a Union to that of Renaissance Italy whose states dominated science, the economy, military science, the fine arts, and technology, and yet which failed to become a world power because of their failure to unite politically.

He defends his own stewardship of the Commission against its persistent critics. Only so much can be done in a year. "If you consider our situation when we came here and how it is now, I think that something has been achieved."

The Commission is a real player, he insists.