Ireland

Full text: Six EU ambassadors give their thoughts on the state of Ireland

Private 4,000-word analysis says future of North-Republic relations ‘strongly depends’ on final Brexit deal

Brexit: ’the single greatest economic and foreign-policy challenge to the Irish state since the Second World War’

Thu Sep 6 2018 - 12:48

The following is the text of a diplomatic note about the state of Ireland from six EU ambassadors to Dublin. It was drafted ahead of the papal visit and circulated to their capitals and diplomatic contacts.

An Essay on Ireland between two papal visits –the years 1979-2018

In 1979, Pope John Paul II visited Ireland. This month, August 2018, Pope Francis will visit Ireland. The visit of Pope John Paul II was the first trip ever to Ireland by any Pope. To stipulate its significance: from Saturday 29 September to Monday 1 October 1979 an estimated 2.7 million people attended events across the country. This was over half of the Irish population. Nearly forty years later, Pope Francis is to visit a completely changed Irish society. Over the four decades the Emerald Isle has seen unprecedented societal, demographic, economic, political, and cultural change. Therefore, Pope Francis’s visit gives us an opportunity to look back and try to understand how this process formed the open, dynamic, cosmopolitan Ireland we know today. This paper is a result of cooperation between the six Ambassadors to Ireland – from Belgium, France, Germany, Italy, Luxembourg and the Netherlands – after a series of interviews with stakeholders within the Irish society.

Ireland at the heart of Europe 1979 was not only the year of the Papal-visit, it was also important in the development for Irish independence after the establishment of Saorstát Éireann (the Irish Free State) in 1922. Although Ireland already joint the European Community back in 1973, in the year 1979, Ireland officially broke the one-for-one link between the Irish pound and the pound sterling. The final decision to align with the European Monetary System was based on a strategic vision that Ireland’s economic and political future lay with a broader Europe rather than solely with the UK. By 30 March 1979, an exchange rate was introduced.

A shift from a pure focus on the UK for political and economic relations to a broader focus on the whole of the EU was vital for the exceptional economic growth in Ireland. Because of Irish membership to the EU, a clear change is visible regarding the Irish attitude towards external actors and in particular the UK. The imbalance between Ireland and the UK slowly vanished by both countries being full members of the club. Until 1973, no UK Prime-Minister ever visited the Irish Republic and the Taoiseach in office always had to travel to London. Now, with a growing agenda between the two countries on all EU matters, instead of just Anglo-Irish relations to discuss, the relation between the two countries changed. This slow process over the years eventually led to the watershed moment of the visit of Queen Elizabeth in 2011.

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With Europe opening up to Ireland, the Irish have embraced their Europeness (with currently 92% approval rating of the EU) and links between the island and “the continent” (as the Irish still say) were never closer. Besides economic and political, factors like the Erasmus-programme, cheap flying, and digitalisation led to more civic engagement of the Irish with the EU. As much as this was anticipated when Ireland joined, it was confirmed once again by current Taoiseach Leo Varadkar in January 2018 when he laid down Ireland’s vision on the future of Europe:

“For us, Europe enabled our transformation from being a country on the periphery, to an island at the center of the world, at the heart of the common European home that we helped to build.”

A more liberal society: Rethinking the role of Irish Catholicism

The first difference which comes to mind with Pope Francis’s visit is of religious nature. The relationship between the Church, the State, and society has completely changed. State and Church in Ireland have always been strongly intertwined, since the Irish Free State and the 1937 Constitution. As can be seen in the scandals that came to light over the last years, the Church is complicit, but so is the State. The Church has been discredited by the yearlong drumbeat of abuse allegations that began to emerge in the early 1990s as well as a cover-up by church officials denying the problem and moving abusive priests from parish to parish. For decades, Irish priests zealously protected their communities from what they saw as the moral dangers posed by sexual promiscuity, unwed mothers and impoverished children, sometimes orphaned or neglected. They used an unwritten, extralegal power — often at the urging of scandalized family or neighbours — to send such women and children to Dickensian facilities like industrial schools, Magdalene Laundries (workhouses run by Catholic orders) and homes for the pregnant and unwed.

The diminishing significance of the Catholic Church that has been ongoing in the past years has created a social gap in society and currently we are still seeing both the State and its people looking to find a new balance in social structures now this very important pillar in life is becoming still less influential. This is portrayed clearly in the current low level of state-organised social structures and the role of the Church in education in Ireland. To illustrate: 90% of primary schools and more than 50% of secondary schools are still run under the auspices of the Church but is financed by the State; discussions about changes to the system are slowly progressing. Ireland is currently witnessing the death of the 19th century idea of charity.

As Fintan O’Toole, a highly acclaimed columnist for The Irish Times states:

“Unlike most other developed democracies, Ireland never build a coherent system of social entitlement around the idea that every citizen had a right to the things necessary for a dignified life. [This is] rooted in the Victorian idea of providing charity for the deserving poor while those who can do so look after themselves. This ideology was not just a product of church control; it is also the basis of the entire political system. That system is run not to ensure that citizens get their rights but to sustain the idea that the TD (member of parliament) ‘gets’ benefits (a job, a hospital bed, a welfare payment) for the constituent.”

This system of control and care by State and Church has lost its grip on society.

In 1979, Catholic social teaching held sway in the Republic with contraception, divorce, and abortion all banned by law. Not so now. That Ireland is no more. The Irish people have directly chosen their course. Over the years, they voted for these shifts: referendums on divorce (1995), same-sex marriage (2015 as the first in Europe), and abortion (2018) testified of fundamental changes of the role of the Church in Irish society. Because rising prosperity within the country, scandals within the Church and church policies in contrast to the more liberal attitudes of the Irish, people are less guided by their faith. Although 2/3rd of the Irish people still identity as Catholic, this made the distance between the Church and the institutions and the Irish citizens bigger. They’ve started to think for themselves and had other options than dependence on faith. In a much broader sense, the grip of the Catholic Church on Irish society has been and is still loosening. As Fintan O’Toole states: “It is a momentous change: a nexus of power and authority that lasted for 150 years is finished.”

With cities mainly having driven the change, today’s Ireland is liberal, welcoming, vibrant, outward-looking, economically successful. And for many, Ireland does not qualify purely as a “catholic country” any more.

Peace on the Irish Island: Northern Ireland

During the visit of Pope John Paul II in 1979 the Troubles were at its height. John Paul II was prevented from going north because of the dire security situation, of which he stated that this grieved him greatly. The critical situation in Northern-Ireland had direct consequences for Ireland. As well, as former Taoiseach FitzGerald – who was in office during the 1980s writes:

“All Irish Governments recognized that in some respect the IRA campaign of violence represented more of a threat to the Irish State than to Britain. The Dublin riots of 1972 and 1981 offered warning signs of what could happen if the violence in Northern Ireland were to overflow to the Republic, with its unarmed police force and its small army.”

The 1998 Good Friday Agreement, achieved with the support of the US but also the EU; has proven to be instrumental to stabilize the situation on the island, to facilitate reconciliation, cooperation and extensive trade across borders. It still is a volatile peace, though, and fears of a re-emergence of conflict due to Brexit are palpable in almost all conversations in Ireland. With Brexit, old ghosts from the past come back to haunt the Irish Island and questions that no longer deemed relevant have come back to the forefront again. This is illustrated in particular by the border question. As the Irish government officially states:

“As the most obvious symbol of the Peace Process, the invisible border on the island of Ireland is essential to the continuing normalisation of relationships. Prior to the Good Friday Agreement, security checkpoints on the border, and accompanying military installations, which had been built and reinforced from the 1970s onwards, were potent symbols of division and conflict in Northern Ireland and were frequent targets for attack. The disappearance of physical border crossings and checkpoints is both a symbol of and a dividend from the success of the Peace Process. People’s daily lives in Northern Ireland and in the border region have been transformed. Any reversal of this transformation would have considerable adverse economic, social, political, security and psychological impacts on people both in border communities and on the island as a whole.”

The future of Northern-Ireland and its relation with Ireland strongly depends on the final Brexit deal between the UK and the EU. With the ongoing negotiations, people are less inclined to say that a united Ireland will not happen in their lifetime. A bad deal for Northern-Ireland can speed up the process towards a possibly united Ireland. With a bad deal the North can lose both of its most important revenue streams, the all-Island economy and UK as well as EU subsidies. Plus, by 2021 demographics indicate a decisive change: the majority in NI will then be of catholic faith. This could trigger people to re-think and change their opinion on the possibility of a united Ireland. Crucial questions would have to be answered: How to accommodate those who feel British? How to incorporate the many differences (as a most recent example: different abortion laws). And: any reunification would be financially extremely costly for the Irish state. Sensible, transparent and accountable decisions are vital for Northern-Ireland and the country as a whole, because of the delicate balance regarding the Northern-Irish peace project.

Spectacular economic growth: the Celtic Tiger boom, the crash and the Celtic Phoenix resurrection

The period between papal-visits to Ireland is also one of spectacular economic growth. From the “poorhouse of Europe” to the Celtic tiger to the Economic Crash to the Celtic Phoenix, it has been a bumpy ride. Where GDP per capita was 15,000 EUR in 1980, it reached a whopping 64.860 EUR in 2018 according to the statistics of the World Economic Outlook of the International Monetary Fund.

Ireland in the 1980s was a country of mass-unemployment and mass-emigration. After being one of the poorest European countries in the early 1980s, by 2008, Ireland had become one of the top 10 richest OECD-countries. During this period, the Irish economy benefited from strong inward investment from foreign multinationals attracted to Ireland by a low corporation tax and its pool of skilled labour. Major multinationals, such as Microsoft and Google, still have their European headquarters in Ireland. The unprecedented growth in the 1980s and 1990s did not go unnoticed. In 1997 Ireland featured on The Economist’s cover as “Europe’s shining light”, accompanied by an article on the transformation of “a sleepy European backwater into a vibrant economy that in some years grew by as much as 10%”. The Irish economy was therefore given the nickname ‘ the Celtic Tiger’. It expanded at an average rate of 9.4% between 1995 and 2000 and continued to grow at an average rate of 5.9% during the following period until 2008, when it fell into recession. Ireland’s rapid growth has been described as a rare example of a Western country matching the growth rates of the ‘Four Asian Tigers’.

The economic growth came to a standstill during the global financial crisis and the European Debt Crisis. In Ireland this coincided with a series of banking scandals. What followed the Celtic Tiger period of rapid real economic growth fueled by foreign direct investment was a property bubble which rendered the real economy uncompetitive, and an expansion in bank lending in the early 2000s. Irish banks went spectacularly bust during the financial crisis and required a bail-out of 64 billion EUR, close to two-fifths of the country’s GDP. Its woes meant that the Irish state had to be bailed out by the EU and the International Monetary Fund in late 2010s. Between its pre-crisis peak in late 2007 and its nadir at the end of 2009, the economy contracted by 11.2%.

The Republic of Ireland was the first country of the EU to officially enter recession when the 2008 financial crisis began, but rose again to become the fastest growing economy in the euro zone. A title it has now held since since 2014. Where the country suffered from a property bubble, housing prices and rents have reached or even surpassed pre-crisis levels and Ireland is back roaring again. As Columnist Brian Boyd wrote in the Irish Times: “Cocaine usage in the country is now back to Celtic Tiger-era levels, a time when it was commonplace in Dublin nightspots to see one of our wretched ‘media personalities’ furiously rubbing their nose into it”.

Rising from the ashes of the crippled Celtic Tiger era, The Economist has dubbed the current growth in the Irish economy the ‘Celtic Phoenix.’ Ireland’s post-crisis economic recovery was driven by foreign direct investment from US-companies in pharmaceuticals and Silicon Valley and from the positive effects of the IMF/ECB-programmes. While this growth model was made possible by Ireland’s low corporate tax rates, it was also a result of inward migration, with these firms using Ireland to directly access the European labour market. The question for the near future is whether this growth is sustainable; Ireland the Celtic Phoenix or merely a case of Leprechaun Economics?

Demographics

Finally, demographics are important to take into account to fully understand Ireland. Hunger, oppression of the Irish, their faith and culture, landgrabbing by the UK, poverty, the Great Famine and the extensive streams of emigration over the years played an important part in shaping the country. In the area covering the present day Republic of Ireland, the population was about 6.5 million in the mid-1840s. Ten years later, it was down to 5 million. The population continued a slow decline well into the 20th century, with the Republic recording a low of 2.8 million people in a 1961 census. No other nation state in the world besides Ireland has a current population smaller than its population in the mid-19th century.

This is very closely linked to the Irish story of migration, where most Irish who emigrated were economic migrants. Their experiences were initially very bad. They were regarded as ‘the scum of the scum’ abroad: being both poor and Catholic. Therefore, the story of Irish emigration has many similarities to the story of the people who stayed in the country where they overcame this adversity and prospered in new countries. The election of John F Kennedy – who was of Irish descent –was and is a very proud moment for the Irish. Many in Ireland used to have two pictures standing on the mantelpiece: one of the pope and one of JFK.

What kept Irish communities so closely together and stimulated them to have a strong sense of Irishness can partially be seen in the gloomy situation of migrants who stuck together in hostile environments. However, it is also explained by reasons that are more positive. The strong ties in sports, culture, music, and storytelling still binds Irish all over the world. The Gaelic games, Irish pubs and literature are strong beacons for Irish emigrants to hold on to in order to keep their feeling of Irishness and their connection to the island. The Irish diaspora have helped to shapeIrish society by their strong connection to their home country. Although a part of the diaspora tend to be more traditional than the people in Ireland itself, there is also a large group that developed new values and many of the emigrants have been important agents for the values of the current society; a cosmopolitan, liberal, inclusive county.

Since the 1960s and the 1970s the population started to grow, albeit slowly. A higher number of people immigrating instead of emigrating particularly after 2004 when among others Poland, the Baltic States and Rumania joined the EU. Today 17% of the Irish have foreign roots (there is very little migration from Muslim countries though). More babies were born and life expectancy rose. Now the country will soon be as populous as before the decline. According to Eurostat, the population grew to 4.9 million at the beginning of 2018. Furthermore, the Ireland of today is no longer a country of emigration and is clearly evolving towards a multicultural society.

Ireland’s future challenges

What’s next for Ireland? The country has many important decisions to make in the near future that will shape the society for the decades to come. To name a few: deciding on the next step of Europeanisation and a changing relationship with the UK because of Brexit, becoming less dependent of foreign direct investment and large multinationals from the United States, reforming its health-system to bring it on par with Western European standards, re-energising the improvement of education as well as structural changes to the role of the church in education, dealing with the current ‘rich-man’s problems’ of overly expensive residential space — which has been called a true housing crisis — and invest in the infrastructure needed to accommodate economic and population growth.

Ireland has too long aimed its growth strategy on being a transatlantic hub for EU market access. Ireland’s reliance on a small number of major multinationals leaves the economy vulnerable and threatens the outlook of growth. Nowadays, five companies in the tech and pharma sectors account for one-third of all Irish exports. As Peter Clinch, chairman of the National Competitve Council put it in relation to Brexit: “Ireland is relying on one big engine as we fly into much stormier skies”

As capital investment was virtually non-existent during the crisis-years there is now a lack of good infrastructure, adequate healthcare, (social) housing, and Ireland needs to step up efforts in education. In relation to this, Ireland has to prepare its (social) infrastructure for the expected strong population growth. Because of that Ireland — for the first time in history — has to critically assess its migration policy and whom it wants to let into the county. The current drop in University ratings is a direct consequence of the downfall in government spending. The government has to make a choice in order to increase education funding: either it should be made possible for universities to increase education fees or government funding needs to be increased. This will be a political challenge.

In response, the Irish government recently introduced Project Ireland 2040, focussing on the development of the country in the light of an expected population growth of 1 million. Focus is also laid on de-centralization (from Dublin) and support for the regions including infrastructure projects, broadband schemes and others. The objective of Project Ireland 2040 is not only economic but recognises that economic and social progress go hand in hand and aims to provide a comprehensive social, economic and cultural infrastructure for all our people to flourish, so that together the Irish can create a better society.

Brexit: greatest foreign-policy challenge since WWII

Finally, the elephant in the room: Brexit. The decision of the UK to leave the EU causes strong economical, civic, political, and civic challenges for Ireland. Brexit represents the single greatest economic and foreign-policy challenge to the Irish state since the Second World War. There is hardly any area of Irish life that won’t be affected.

From an economic perspective, Ireland has over the last forty years enhanced its European and global trade extensively, but needs to diversify its exports to other external markets even more, because of the high dependency of exports to the UK. Political challenges lie ahead regarding Ireland’s place in the EU. Nevertheless, mainly from a civic point of view, the Irish border question needs to be answered in order to ensure the stability on the Irish island.

If Brexit has any positives for Ireland, it is to be found in the further progress of maturing on an international stage. Ireland will not only have to ask itself the question what it wants from the EU, but needs a stronger vision of what it wants the Union to look like when it can no longer follow their most like-minded partner, the UK. This will be a difficult and bumpy process, as Ireland will be the only EU-country based on an Anglo-Saxon model, for example regarding the common law system. Ireland already set out to find new allies and build new coalitions in Europe. With the strong economic growth, Ireland has changed in that respect. Whereas it used to call itself ‘the Latins of the North’ this no longer holds true. It has transformed to the country which is looking more to Northern-European countries, which is shown by the current coalition of the new Hanseatic League. Brexit is therefore the last step towards independence of the UK for Ireland, both from an economic and political perspective. As Irish economist and journalists David McWilliams wrote: “As Britain was [in the last 30 years] becoming more intolerant, obsessive and relatively poorer, Ireland was becoming more tolerant, flexible and relatively much richer. The Irish economy grew at multiple times of the UK economy, leaving it miles behind us on almost every economic and social metric. We are open to economics, trade, commerce and talent and have become a thoroughly modern place to live and do business.”

With all these domestic challenges in this volatile foreign environment, it is positive to see the current engagement of the Irish Government and their recently published investment plan Ireland 2040 and Ireland’s vision on expanding its diplomatic network & ‘footprint’ in years to come.

Authors Ambassador of the Kingdom of Belgium in Ireland H.E. Mr. Pierre Emmanuel DE BAUW Ambassador of the Federal Republic of Germany in Ireland H.E. Mrs. Deike POTZEL Ambassador of the Fifth Republic of France in Ireland H.E. Mr. Stéphane CROUZAT Ambassador of the Republic of Italy to Ireland H.E. Mr. Paolo SERPI Ambassador of the Grand Duchy of Luxembourg to Ireland H.E. Mr. Jean OLINGER Ambassador of the Kingdom of the Netherlands to Ireland H.E. Mr. Peter KOK

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