Having to opt for UK or EU is our nightmare scenario
TWO OF the three political unions of greatest importance to Ireland – the EU and UK – are in flux, and the latter’s relationship with the former is set to change, probably fundamentally.
To see how big possible future changes could be for Ireland, consider how important shifts in the external environment have been in the past.
The reasons for the transformation of the Irish economy from the early 1990s are manifold and remain much discussed. But important and all as domestic factors were, the Celtic Tiger would never have existed had the international economic and political context of the time not been as it was.
The acceleration of the globalisation process in the early 1990s was spurred by a much improved international security environment following the end of the cold war. The move towards a single market in Europe was both a driver and a manifestation of internationalisation. Among the most striking measures of this was a 6.5-fold increase in worldwide foreign direct investment flows during the 1990s. The liberal (and liberalising) European and global economic order of that time appeared almost designed for the Irish development model as it has existed since the last 1950s.
The EU’s westernmost economy would simply never have become a rich hub in the transatlantic economy if the external environment had not evolved as it did.
And as if there was not enough good economic fortune in the 1990s, the North’s troubles came to a merciful if stuttering end and relations with Britain – to this day our most important trading partner – fully normalised. In short, all the planets aligned and relations with the three actors who really matter – Europe, Britain and the US – were as close to ideal as anyone could ever hope they might be. But in a universe in constant motion the planets don’t remain aligned for long.
Of the three entities whose gravitational pull most affects Ireland’s orbit, the US appears most stationary. For all the heat generated by its polarising politics and the breast-beating of the country’s China-obsessed declinists, north America’s 236-year-old union is more stable and predictable than those to our east. An illustration of this is that it makes little real difference to Ireland, or indeed Europe more widely, who wins next week’s US presidential election because neither candidate seeks to change relations with our part of the world.
To the east everything looks much less predictable. Few would now deny that the euro zone crisis poses an enormous risk to the European economy and an existential threat to the post-war European state system. Simultaneously, changes in Britain’s domestic politics are driving the UK towards disengagement from that system. If that happens, and Britain ceases to be a full participant in Europe’s single market, there are real dangers that barriers to trade, investment and possibly even labour could rise between Ireland and the UK.
Matters on these islands are further complicated by the possibility that two years from now the Scots may very well have voted their way out of their 1707 union with England and Wales. The implications for this island would be multiple: for the stability of Northern Ireland; for relations between Ireland’s two polities; and for both polities’ relations with Scotland and the rump UK.
Being faced with the choice between Britain and Europe has for many decades been this State’s strategic nightmare. How to plan to face that eventuality is made even more difficult by the risks of fragmentation of both the UK and the EU. It is made more difficult still by the extremely (and eternally) limited influence a small and relatively powerless state has over outcomes involving much larger and more powerful entities.
But consideration of such potentially huge change is necessary, not least because we have an innate tendency to under-emphasise the probability of new scenarios arising of which we have no experience.
Five years ago nobody foresaw the scale and duration of the great recession and its era-defining consequences. Scholars and analysts have been just as blind to some of the other greatest upheavals of the past 100 years. Just months before the collapse of the Soviet empire and the outbreak of the first World War, no one was predicting that either of these world-changing events would take place. In 10 years from now, changes that are barely imaginable, and others not even yet conceived, will have come to pass.