Ray Bassett and the EU.

A major talking point this week has been the suggestion made by Ray Ray-BassettBassett, a former Irish ambassador to Canada, that Ireland should leave the EU in the wake of Brexit. Mr Bassett’s argument is essentially economic. He believes that the Irish economy is still so intertwined with the British that Ireland will pay an unacceptably high cost if it remains in the EU after Britain has left.

The part of the  interest in all this is the way in which Mr. Bassett’s argument reveals the limits of purely economic thinking. Of course in one way we are all Marxists now. Economics is important. But as J.R. Lucas emphasised they are not all important. And no doubt the British connection is still vital in Ireland- especially up and down the East coast- although London does feel a long way away in Galway.

Human beings though are not solely controlled by economic motives. They have loyalties, loves and hates which go far beyond getting and spending. Just as the British people showed when they voted in June 2016 that taking back control was more important to them than the claims of the experts- most of whom seemed to be economists- so the Irish people at present believe that the European Union is more to their political taste than a free trade relationship with Britain- which seems to be the alternative being promoted by Mr. Bassett.

There are two parts to the explanation for this. There is, of course, the difficult legacy of Anglo Irish history. Ireland still wants to differentiate itself from England. If England measures in miles, then “sure as eggs is eggs” Ireland will want to measure in kilometres. But this tendency is becoming less important. England is increasingly being seen not as the ancestral enemy but simply next door. More important now is the point that Britain and Ireland have quite different experiences of the EU. In Britain the EU appears to be just another level of intrusive, unnecessary, and  welcome bureaucracy. But in Ireland it is associated with modernity, efficiency, good administration, transparency, and a new prosperity. In Britain the EU is about square bananas, whereas in Ireland it is about new motorways. Unsurprising then the EU has sunk deep roots in Ireland. The Irish people were as much puzzled as shocked by Brexit. They just didn’t “get” what the English Brexiteers were worried about.

All this is reflected in the opinion polls. The EU is still very popular in Ireland. And any proposal to withdraw Ireland from the EU would have to be voted on. And there is at present no chance that any such referendum would pass. Indeed it would probably be very heavily defeated in every constituency in the country.

The danger then of Mr. Bassett’s visionary proposal is that it will detract attention from the real difficulties that further European integration poses for Ireland. This country’s newfound wealth is not due just to access to European markets- important as they are; but also to our low rate corporation tax- and, of course, the much higher equivalent rate in the United States. It is simply impossible, as Mr. Bassett recognises, to imagine modern Ireland without our low business tax regime. It is the very foundations of modern Irish prosperity. And yet this relative advantage of that Ireland enjoys is under active threat from integrationist forces deep within the EU that are determined to harmonize tax  rates throughout the Union.  The most important immediate challenge then for Ireland today is simply this:  How can we protect our low business tax rate on which our prosperity depends? 

It is not obvious in the short run, that talk of Ireland leaving the EU will make this vital task any easier. Given the state of our public opinion about the EU, we have then, on this issue, no choice but to collaborate with our European partners. For now we need all the friends we can get in Europe if our present tax regime is to continue..

In the long run though Mr. Bassett’s proposal may will be of value if it concentrates the minds of Irish decision makers on another but less immediate question that faces this country, namely whether of not Ireland is really a good fit in a European super state dominated by France and Germany, or whether some alternative might be worth considering? But that, as we say in North Wexford, is “another day’s work!”

Leave a Reply

Your email address will not be published.