One year ago at the Dublin European Council, Mr Bruton, then taoiseach, paid tribute to the British prime minister, Mr Major, for his contribution to the summit discussion on flexibility within the European Union. Mr Major warned his colleagues of the danger that flexibility could disrupt the EU's decision-making integrity and create different tiers of membership.
There are uncanny echoes in Luxembourg of these concerns, one year later, with a Labour government in power and a seachange in the tone and style of Britain's relations with Europe. But has the substance of policy changed as much? Britain's leaders are still concerned about flexibility; not about the chapter written into the Treaty of Amsterdam which carefully constrains its operation, but about the institutionalised flexibility contained within the project for economic and monetary union, based on differentiation between states that will participate in it and those which cannot or will not do so. So flexibility is revisited here with a vengeance, as the penny drops that Britain could be excluded from the co-ordination of economic policy in Europe which will follow a successfully functioning euro.
Mr Blair's spokesman railed against the Guardian and other British newspapers for exaggerating Britain's isolation on the issue of the EuroX council, the ministerial group of EMU member-states - that "tedious game played out under the last government".
He said there was growing support for Britain's position that the Ecofin council of all 15 member-states "must remain the decision-making body for EU economic policy". If the EuroX group of "ins" wished to discuss matters affecting those outside, the "outs", they should be able to participate fully. Britain wants "to protect and maximise" its influence on all such decisions.
Mr Bruton and the Irish EU presidency were concerned last year to avoid the emergence of a "quatorze" scenario in which Britain would be pitched against the rest in the Inter-Governmental Conference that culminated in the Amsterdam Treaty last June. This was not in the Irish interest, they felt, given the close relations between the two countries and the need to preserve goodwill in the Northern Ireland talks. Their success in avoiding such a scenario was a significant if unsung achievement.
Within the current negotiations on the EuroX the same considerations apply. Among the prospective "in" states, Ireland has been among the most sympathetic to Britain's concerns about being excluded from an important centre of decisionmaking. It is in Ireland's interest that Britain joins EMU. Irish ministers believe Britain should have a strong influence, as a counter-weight to France and Germany, which should in turn make it easier for the smaller states to have an effective voice in the management of, and the direction taken by, the single currency. There is also a fear that the flexibility built in to the Schengen accord on free movement of people, which excludes the UK and Ireland, along with neutrality which constrains participation in security structures, could be replicated in other spheres.
Further, the more Britain is involved in EMU decision-making the more it should have to accept its disciplines, including the crucial competitive matter, for Ireland, of relations between the values of sterling and the pound. The British make much of the issue of "common concerns" which bind the 15 member-states together. But the phrase comes from the Maastricht Treaty where it is used to define how exchange rates within the EU should relate to one another. Although the Labour government has refused to join the exchange rate mechanism it will find it more difficult after this argument to keep open the option of competitive devaluation of its strong currency.
This summit will probably come to be seen as the moment when British policy-makers became convinced that EMU is going to happen, that its coming will create an emergent macroeconomic agenda and that British interests could be gravely affected by being excluded from the associated decision-making. The same applies across the Atlantic, where the similar groups are described by a prominent Brussels correspondent as being in a panic over the geopolitical and geo-economic implications of a single European currency. It would challenge the dollar's monopolistic role as a reserve currency and signal the emergence of conflicting interests between the European and US regional blocs. So much so that Martin Feldstein, Professor of Economics at Harvard and a former administration official, writes in the current Foreign Affairs of the possible military conflicts EMU could trigger off.
Scepticism about EMU's likelihood and feasibility has mutually influenced neo-liberal US and British economists, who enjoy more influence than their continental counterparts. In the 1980s they opposed such grand statist projects and came to believe, mistakenly, that they had had their day. Their influence may be seen in Ireland among a number of economists schooled in the Anglo-American discipline who have disparaged monetary union and underlined the continuing Irish dependency on the British economy. They have tended to shrug their shoulders when confronted with the political will that has brought EMU about, as if that were irrelevant to economic life.
Au contraire!
Their methodological shortsightedness contrasts with the commitment among the mainstream political and economic elites that the balance of advantage for Ireland lies decisively in keeping a place at the centre of decision-making, twenty-five years from the time Ireland and Britain joined the EEC together in January 1973. Even if it is not the intention of those who advocate delayed Irish participation in EMU to reinforce dependency on Britain politically and economically, that would be its objective effect.
An Irish decision to stay out with Britain during what proved to be an interim period would unnecessarily damage Irish interests, whether in terms of access to centres of decisionmaking at a time of crucial change in agricultural and cohesion policy, in terms of foreign direct investment or the more general Europeanisation of Irish identity that has reduced our Anglo-centricity - despite the evident vulnerability of this economy to a sharp sterling devaluation.
It is surely better to maximise political access to EU institutions and to pursue common interests with Britain both in the European context and in the bilateral context of the Northern Ireland peace process.
