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How should Ireland respond to Emmanuel Macron’s plans to reform Europe?

Important that French president be backed as a bastion of decency and moderation

President Emmanuel Macron’s rallying call to those who wish to defend the European democratic model from populist and illiberal forces across the continent deserves a broadly positive response from all who believe in the values of the European Union.

It poses a particular challenge to this country where there are suspicions the French agenda involves a threat to the economic model based on foreign direct investment which has played such an important role in creating our current level of prosperity.

However, it would be a serious mistake to allow suspicions about Macron’s motives to get in the way of a coherent response to the French president. His proposals need to be taken seriously and examined in detail to establish what elements of his programme we can live with and what we can’t.

For a start we have to recognise that Macron’s victory in the French presidential election last year represented a hugely important triumph for the forces of decency and moderation over the kind of populism that still threatens to drag Europe back into the aggressive nationalist competition of the 1930s.

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Macron's victory in the French presidential election last year represented a hugely important triumph

In the era of Brexit and Trump, the election of Macron represented an alternative, much more benign vision of the future. It is vital that the tolerant, liberal view of the world he represents ultimately prevails even if there are elements of his programme that cause us difficulty.

The bottom line for Ireland is that the British are going to leave the EU. That means that we need to redefine our role and objectives and in the process develop new alliances to promote not only our own interests but the kind of EU we want to see developing.

Franco-German axis

Since the Brexit decision, leading Irish politicians have been expressing worries about the EU being dominated by the Franco-German axis but this is to miss the point that the alliance between the two big countries, whose rivalry plunged the continent into two World Wars, is the foundation on which the union is built.

When Ireland joined the then European Economic Community in 1973, the then minister for foreign affairs Garret FitzGerald made the decision to row in wholeheartedly behind the Franco-German axis, recognising that it was the motor that drove the whole project.

Having escaped the clutches of British economic domination, with its emphasis on cheap food, the Common Agricultural Policy gave us our first substantial injection of European money.

In the 1990s when the project was re-energised, it was the massive transfers to Ireland in the form of structural and cohesion funds that laid the basis for the economic expansion that became the Celtic Tiger. Even with the domestically inflected crash of 2008 to 2010, we are now back at the kind of record employment levels that characterised the height of the boom.

It is worth repeating that when we joined the EEC our living standards were roughly half those of the UK and our population was just over three million. Now after more than four decades of membership our living standards, depending on how you measure them, are at last as high as those in the UK and probably higher while our population is heading towards the five-million mark.

After more than four decades of EEC/EU membership our living standards are at last as high as those in the UK

While the foreign investment generated by our low corporate tax rate has undoubtedly played a huge part in our economic advance, it is fair to say that such investment would not have happened if we were not members of the EU with access to its enormous market.

Over the past two decades, there was an appreciable shift in Irish policy back towards an alliance with the UK in defence of more liberal trading arrangements and light-touch regulation. The consequences of some of those policies manifested themselves in the crash.

EU allies

Brexit has changed the dynamic in a fundamental way and the British will no longer be there as potential EU allies. The Government has wisely moved to develop other links, particularly with the Dutch, the Scandinavian and Baltic countries in an effort to form an alliance in defence of liberal trade policies.

In any case Macron’s drive for much closer integration through measures like strengthening the euro zone through reform of the banking system and a common approach to taxation will not find easy acceptance in Germany.

Chancellor Angela Merkel has said she will work to find “common solutions with France” on EU reform plans by June, but emphasised she was not anxious that such reforms were too sweeping.

Nonetheless, while Macron will certainly struggle to implement his full programme, it would be a mistake to underestimate his ambition. He is undoubtedly right on the need to offer an alternative vision to confront populism and to build the structures that will ensure the survival of the euro.

His proposal to create a European digital tax is a recognition that the power of the US multinationals to avoid paying tax anywhere cannot continue, while his commitment to EU energy independence and concrete measures on climate change are also welcome.

If the Government wants to influence the outcome of Macron’s reform agenda, it needs to engage in a constructive manner rather than simply digging its heels in and saying no to everything.