Rejection of the Nice Treaty by the Irish electorate would not threaten inward foreign investment and jobs, maintains Patrick Kenny.
The campaign for the ratification of the Treaty of Nice in 2002 stands in sharp contrast to that served up in 2001, both in terms of the passion employed in the campaign and the choice of arguments used to convince the electorate to reverse their democratically expressed wish of just 16 months ago. One of the most significant differences this time around, however, is the attempt to muddy the waters of debate with frequent reference to the supposed economic implications of a No vote.
The benefits of the Single Market and the remarkable recent performance of the Irish economy are frequently alluded to by those seeking the ratification of the treaty. This is very interesting in its own right, but wholly irrelevant in respect of Nice. Similarly, the prospect of an enlarged EU presents opportunities for exploitation by Irish companies, but again this is of no relevance to the referendum question, as enlargement will proceed irrespective of the result. Arguments of this type, trotted out with casual regularity, would be pertinent if the issue was about our membership of the EU; and, 30 years into the project, they are looking distinctly past their sell-by date.
Without doubt, the biggest red herring of all is the notion that a rejection of the treaty would in some way threaten foreign direct investment and jobs in Ireland. Not only has no concrete and measurable evidence been presented to support this contention, but there exists some interesting empirical data indicating the contrary.
Just last month the UN released its World Investment Report 2002, showing, among other things, major global investment trends. One of the most surprising statistics to emerge from this report is that Britain, notwithstanding the fact that it is outside the euro zone, is now the second most popular destination in the world for foreign direct investment, and number one in Europe. Furthermore, recent statistics have shown that Sweden, which is also outside the euro zone, has seen its percentage share of EU inward investment more than double between 1999 and 2001.
This does not constitute an argument against the euro and must not be misinterpreted as such. Rather, it shows that these economies, which are most definitely perceived as being disengaged from the EU project, have not suffered in investment terms as a result of rejecting a key element of EU integration. This is primarily because investment decisions are made on the basis of underlying economic fundamentals, such as low tax rates, good workers and ready access to European markets.
Not one single element of these fundamentals will be negatively impacted in the event of a No vote and it is misleading to suggest otherwise. Perceptions may be important, but when a democratic rejection of a treaty is placed in the balance with hard economic realities, they count for little.
It is quite surprising therefore that respected Government spokespersons can casually raise fears about the economic implications of a No vote when there is empirical evidence that contradicts such a position.
Respect for the political process in this country was significantly tarnished when revelations emerged about the Government's knowledge of the state of the nation's finances prior to the election.
The integrity of the political process will be further undermined if the Government continues to raise needless public alarm in its attempt to secure a referendum victory.
The ratification of the treaty itself, however, does pose serious challenges for Ireland. If the treaty is ratified, we will have acquiesced in the removal of the unanimity requirement on enhanced co-operation, allowing a subset of states to proceed with the creation of what would essentially amount to a union within the Union. It is widely accepted that one of the first policy areas to be tackled under enhanced co-operation will be the harmonisation of taxes across the euro zone. The Government has, of course, retained a veto on our own tax levels, but not on whether such harmonisation should occur within the EU at all. Thus the Irish Government would be faced with an invidious choice of either agreeing with tax harmonisation at a higher level or remaining on the sidelines outside the integrationist inner core.
The first option would eradicate one of our key advantages in attracting inward investment, and the second option would, by the Government's own logic, leave us disengaged from the heart of European integration, undermining in a very real way our political influence over crucial aspects of economic policy. It is little wonder that Dr Garret FitzGerald, writing in The Irish Times in May 2000, described such a development as a "nightmare scenario" for Irish policymakers.
In any event, taxation policy is likely to remain a hotly contested issue throughout the euro zone, and Irish policymakers must remain firm in their opposition to any EU interference with national tax-setting powers. It is somewhat bewildering, therefore, to read about senior Government figures suggesting that if we vote No we will be in some way forced to yield our veto on taxes in a future treaty, ostensibly as a "punishment" for rejecting Nice. Such a development would, to borrow Charlie McCreevy's phrase, amount to an attack on democracy.
In my view, merely contemplating such a prospect raises serious questions about the level of democracy and national freedom in what appears to be an ever more integrationist EU.
Patrick Kenny is a lecturer in business policy at the Dublin Institute of Technology and is an adviser to Equal in Europe, a pro-EU, pro-enlargement organisation seeking a No vote in the Nice Treaty referendum