Ireland's success during the first two decades of its membership of the European Community was remarkable. We won respect for the way we handled successive Irish presidencies, in 1975, 1979, 1984 and 1990, as well as through the 1984-5 Dooge report on the revitalisation of the Community. This was consolidated by the way we then gave unhesitating support for the surprise proposal at Milan in June 1985 to relaunch the single market by calling an inter-governmental conference, writes Garret FitzGerald.
In contrast to our stance, the UK, Denmark and Greece tried but failed to vote down this proposal, for which Margaret Thatcher subsequently had the nerve to claim the credit!
Without annoying its partners, Ireland - with a population that even in the smaller Community of that period accounted for little more than 1 per cent of the total - managed to secure 6.5 per cent of the Regional Fund and up to 13 per cent of the Social Fund, as well as huge agricultural transfers. These transfers have since added up to €35 billion which, after deducting our contributions to the Community budget, has, on average, added annually 5 per cent to our GNP. This is far more than was secured during this period by any other member state, including some which were poorer than Ireland.
In 1976 we also secured a trebling of our fish catch at a time when other countries were required to cut back on theirs. And in the mid-1980s we won a 13 per cent bonus in milk quotas over and above our partners.
Why did we benefit so disproportionately from Community membership? In part because, as a northern European country more dependent on agriculture than its neighbours, we benefited particularly from a Common Agricultural Policy designed primarily for northern European farming.
At the same time we benefited from the Structural Funds which had been established primarily to aid less well-off areas of the Community, principally in southern Europe. This latter success reflected a combination of three factors. The first was the exceptional negotiating skills of Irish ministers and civil servants. The second was that we used these funds more effectively than did some of our partners, so that at times we secured a bonus in the form of an eventual transfer to us of funds which other countries had failed to draw down.
But there was also a third, unquantifiable, factor: the exceptional goodwill of some of our partners during these first two decades, especially France and Germany. I can personally testify that during the first 20 years of our EC membership we benefited greatly from this factor. This was particularly notable during the milk levy negotiations of the mid-1980s, when the then president Mitterrand's intervention to make the case for additional quotas for Ireland visibly shocked Margaret Thatcher, who was quite unaccustomed to the idea of statesmen deviating from the narrow pursuit of their own country's interests.
All this goodwill towards a poorer neighbour was, of course, bound to diminish as we began to catch up economically with the rest of Europe, especially as an important part of our success certainly derived from the effects of our low corporation tax. This attracted to our small country 20-25 per cent of all new US industries - a far larger share than either France or Germany secured. But the inevitable shift in sentiment was notably accelerated by the overblown demands we made on the Structural Funds in 1992, and by the exaggerated claims then put forward about the success we achieved in that process.
In the latter half of the 1990s Ireland's reputation in Europe was further damaged by governments stalling on participation in the Partnership for Peace, a structure that had secured the enthusiastic participation of all former Warsaw Pact and neutral countries as well as NATO members. This negative attitude on our part, which culminated in Fianna Fáil's half-baked, and later broken, promise not to join PFP without a referendum, further damaged Ireland's reputation in Europe.
THERE followed a series of ministerial blunders which gratuitously heightened tensions between Ireland and the rest of the European Union, including the European Commission. Already, when the Commission had raised the issue of the disparity between our corporate tax rates on industry and services and those in the rest of the Union, the aggressive attitude of the Tánaiste and Minister for Finance put at risk our low tax rate - a situation that was retrieved with difficulty by the skilled efforts of senior civil servants, who eventually secured the 12.5 per cent tax rate compromise.
On top of all this we had the unfortunate "Boston versus Berlin" speech by the Tánaiste; the attack by Síle de Valera on some unspecified applications to Ireland of the Habitat Directive (the introduction of which our Government had, of course, supported in the Council of Ministers); and finally the McCreevy megaphone diplomacy which followed the Commission's critical comments on the Irish Budget for the year 2000.
These crude and counter-productive interventions, which undermined the efforts of the Minister for Foreign Affairs, Brian Cowen, have had two effects: first, our growing unpopularity in Europe has been compounded; second, all this ministerial negativism contributed to the domestic climate of increasing hostility to the EU that finally led to the narrow defeat of the Nice Treaty.
The threat this defeat poses to the enlargement of the Union through the admission of 10 new members in 2004 has inevitably drawn upon Ireland the silent hostility of our partners, and has also deeply alarmed the applicant countries which had looked to Ireland as an example of how a poor country can catch up with the rest.
During the last two years I have spent a good deal of time explaining the roots of Irish economic success to the people of many of these countries - Bulgaria, Macedonia, Serbia, Croatia, Hungary, Estonia - and indeed more widely through a conference on competitiveness in Budapest last week involving 30 countries in Eastern Europe, the Caucasus and Central Asia. Because of this I am deeply conscious of what we have lost as a result of the damaging way in which we are seen as having handled our affairs during the past decade.