Ireland loves to trot out the well-worn trope of being the most “pro-European” of all EU member states. The findings of some Eurobarometer surveys are duly commended as marking Ireland out as a bastion of European ideals. After all, we are proud to see ourselves – particularly after Brexit – as dutifully contributing to the process of European integration.
Even the French president Emmanuel Macron – he of the common corporate tax ideal – assures us that Ireland “occupies a precious place in the heart of the European Union”.
The problem is that the gap between this lofty vision and the reality facing Ireland in Brussels is widening by the day. Forget the staged cordiality of Macron's official visit; for the EU Ireland is starting to represent a serious impediment to its goal of a deeper, more integrated Europe.
This is more than mixed messaging, it's a type of 'sure everything will be grand' politics that pervades Irish thinking on EU affairs
At the heart of this problem lies Ireland’s lack of vision for the future of Europe. It is compounded by the strategic drift of successive Irish governments on European affairs. Dublin seems to have no problem developing plans to assuage the concerns of multinational investors in Ireland, but when it comes to serious engagement in the EU, it is recycled rhetoric not the political reality that governs Irish actions.
Ireland’s contribution to the ongoing future of Europe debate is a case in point. While Taoiseach Micheál Martin is explicit in supporting an increase in the “fiscal strength of the union so that it can do more than limit countries, it can directly enable growth”, his Minister for Finance Paschal Donohoe continues to advocate against the harmonisation of tax powers at European level. At least one of them seems oblivious to the fact that corporate tax centralisation is a key component of the EU’s move towards more fiscal integration.
This is more than mixed messaging, it’s a type of “sure everything will be grand” politics that pervades Irish thinking on EU affairs. Worse still, Ireland’s belated conversion to a bigger spending Europe is inconsistent with the longer term viability of Ireland’s economic model.
As a hyper-globalised, flexible, small economy dependent on Anglo-American investment flows – 75 per cent of recent foreign direct investment into Ireland came from the US (58 per cent) or the UK (17 per cent) compared to just 5 per cent from Germany – Ireland should be fighting for a smaller, not larger, European economic model. A model that ensures the greatest amount of economic policymaking is retained at national level.
Small states need to be flexible to survive. That’s the reality of the economic model which Ireland subscribes to.
The Biden administration's corporate tax proposals show that Ireland is now a prisoner of both Boston and Berlin
The alternative option, much beloved of the chattering Irish Europhile class, is the turning of Ireland into a more “European” state. Alas, Dublin chose Boston over Berlin decades ago. Ireland’s economy and society are Anglo-American constructs, certainly not European ones. We have the privatised childcare, the narrow tax base, the chronically bad public transport, university fees (that are not called fees) and the subsistence level social security model to prove it.
This approach would also require Irish politicians to acknowledge how the Irish economic model has distorted Ireland’s perceptions of itself within the EU. Ireland’s economic success is far from overwhelming, notwithstanding decades of political bluster. As highlighted by Prof Patrick Honohan and others, Ireland is far from the most prosperous country in Europe. We remain amongst the “poorest of the rich” in the EU. Just as we did in 1988. This is not a narrative designed to win votes in future elections.
Brussels understands that Dublin is now in a bind of its own making. Ireland’s entire economic model is predicated on EU membership and on attracting US investment through low business taxes. These two pillars may soon be incompatible as Europe seeks a more integrated, more centralised post-Covid EU. A minimum global corporate tax, or at least a harmonised European rate with a digital tax add-on, are just the first steps.
Yet, instead of trying to shape the path of European integration, Ireland has been asleep at the wheel. Dublin now finds itself an onlooker of an integration process where its hands are kept firmly away from the controls. The Biden administration’s corporate tax proposals show that Ireland is now a prisoner of both Boston and Berlin.
The never-talked-about implications of Ireland’s laissez faire thinking on Europe have thus been laid bare. On many policy issues – digital affairs, data protection, taxation – Ireland is no longer viewed as a credible voice in Brussels. Dublin is simply viewed as being too close to other vested interests.
As the coming months will show, Brexit really is the least of Ireland’s problems in Europe. Brexit might be resolved one day but Ireland’s inability to balance the obligations of EU membership with its Anglo-American underpinnings will likely haunt Dublin indefinitely.
Hence, and wrapped in the beautiful rhetoric of a stronger Europe, Macron is turning the screw. He won’t be the last.
Eoin Drea is an Irish economist working in Brussels at the Wilfried Martens Centre for European Studies. The views expressed are personal