Since Ireland joined the European Union (then known as the EEC) in 1973, Ireland has been a massive beneficiary. Today, we have the sixth richest economy in the OECD area, approaching the standard of living of the Netherlands or the US.
In the early years of membership, its main benefit was seen as the flow of funds from Brussels, particularly for farmers. In the 1970s, net receipts from the EU amounted to more than 3 per cent of national income each year.
In the 1980s, when the economy faced big challenges, the flow increased to more than 4 per cent a year, and it stayed at that level through most of the 1990s.
While farmers were the main beneficiaries of the initial EU largesse, from the end of the 1980s, Ireland also received significant funding for investment in infrastructure and in upskilling.
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EU structural funds enabled Ireland to invest in infrastructure like roads and water supply, and in training and education, on a scale that Irish governments alone could not afford.
These investments enabled our economy to modernise and to build its capacity. While the government was free to choose the priority areas for investment, advice from Brussels also helped guide funds to where they might be best used.
Ireland’s economic success means it has moved from a net beneficiary to becoming a net contributor to the EU budget. However, because of continuing substantial support to agriculture, our net contribution to the EU comes to only 0.3 per cent of national income.
Successive Irish governments have supported an increase in the size of the EU budget, despite the fact that it will increase our net contribution. The EU is better placed than individual member states to fund measures that benefit Europe as a whole, like investment to promote economic convergence of poorer members, or investment in research.
A growing EU budget also increases the chance that farming transfers won’t suffer too much to make space for other priorities. While our contribution next year will rise by almost €1 billion, farming receipts will mean the net cost will remain quite limited.
The Maastricht Treaty of 1992 ushered in the EU Single Market, where no government can discriminate against products and services produced in another EU country. This has been of huge benefit to Ireland as a small country dependent on export markets. This underpins the success of vital sectors for Ireland, like pharmaceuticals.
The benefits of membership are much broader than its impact on our economy and incomes. From driving equal treatment for women, ending the marriage bar, and exposure to ideas from outside the Anglosphere, the EU has been an important force in public policy.
Ireland has benefited from cross-EU solidarity both to help build Irish prosperity, and to help us in times of difficulty. After the financial crash of 2008, albeit with some initial hesitancy, partners in the euro area alongside Sweden, Denmark and the UK provided financing at competitive interest rates to enable Ireland to stage a dramatic recovery from its self-inflicted economic collapse.
The EU Commission played a strong role in ensuring that the Brexit deal would encompass the complexities arising from a common border with Northern Ireland. Without this forceful help, we would never have achieved such a positive outcome in bilateral negotiations between Ireland and Britain, and could have faced an economic and political crisis on the island.
More recently, the trade deal achieved by the EU Commission with the Trump administration has protected our important pharmaceutical sector from potentially catastrophic damage.
While Ireland has benefited hugely from EU membership, we need to reciprocate the solidarity we have received, and demonstrate concern for vital interests of our fellow EU citizens. When we expect other countries to defend our vital interests, we need to follow suit – like recognising the benefits of the Mercosur deal for a German car industry in crisis.
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Going beyond the purely economic sphere, the threat of Russian aggression to the very existence of member states in the east of the EU must concern us. This will affect future EU spending priorities.
The collective power of a union of 450 million people can enable Ireland to achieve things it could never do on its own. Of course, the EU is not perfect, and reforms are urgently needed to address the range of challenges Europe faces. The Draghi Report published last year highlighted a wide range of measures needed to raise productivity across the EU.
Ireland needs to play a positive and constructive role in supporting necessary reforms. In a world where US policy has become increasingly erratic, a thriving EU is in all our interests.
