Barry Colfer (Cambridge University, European University Institute), Ian Cooper (DCU Brexit Institute) and John O’Brennan (Maynooth University)
BRIDGE Network Country Report
- Crisis Impact and Response
- Euro-Crisis
Ireland experienced a credit-fueled property bubble in the years leading up to 2008. When the subprime mortgage crisis in the US spread to Europe, this led to a crash in the Irish property market and a banking crisis in Ireland. On 30 September 2008, the Irish government made the rash decision to guarantee all private liabilities in its main domestic banks, which put Irish taxpayers on the hook for the reckless behaviour of private actors. The budget deficit ballooned to 32% of GDP in 2010. The Irish government was forced in November 2010 to accept a €85 billion rescue package from the EU, ECB and IMF. This was accompanied by and a four-year austerity plan with massive cuts to public spending, and the Irish state was subject to deeply intrusive scrutiny of its budgetary and expenditure decisions by officials of the EU, ECB and IMF (the “Troika”). However, Ireland was able to successfully exit the bailout programme in December 2013 and it returned to growth in 2014, a relatively quick recovery compared to other troubled Eurozone states such as Greece.
Irish voters took out their wrath on their own politicians rather than on the EU. In the February 2011 election, the ruling Fianna Fáil party suffered the worst defeat of a sitting government in the history of the Irish state. The opposition Fine Gael won the most seats in the history of the party, and subsequently formed a coalition government with Labour. The following year, the Irish government held a referendum on the Fiscal Compact treaty, the only EU member state to do so. The Irish electorate had on two previous occasions rejected EU treaties, the Nice Treaty of 2001 and the Lisbon Treaty of 2008 (each of which was subsequently reversed in a second referendum) it was no sure thing that voters living through EU-imposed austerity would approve this one. However, in the May 2012 referendum over 60% of Irish voters approved the ratification of the Fiscal Compact. This may in part due to the fact that any future access to the EU’s newly created bailout fund, the European Stability Mechanism, would only be made available to states that had ratified the Fiscal Compact treaty.
- Migration
Being outside the Schengen area of passport-free travel, and being an island on the Western periphery of Europe, Ireland was not deeply impacted by the migration surge of 2015-2016.
- Rule of Law
Ireland is not implicated in the EU’s Rule of Law crisis.
- Brexit
Ireland is undoubtedly the EU member state most affected by Brexit, and the one that was most deeply implicated in the Brexit negotiations, due to the intractable nature of the “Irish border question.” The essence of the problem was that if the UK opted for a “hard Brexit” (leaving the EU’s Single Market and Customs Union) then this would necessitate a customs and regulatory border either on the island of Ireland (separating Northern Ireland from the Republic) or in the Irish Sea (separating Northern Ireland from Great Britain).
When the UK voted to leave the EU in June 2016, the Irish government was immediately alert to the threat this posed to its national interest. Not only did the prospect of Brexit – and with it, the possible imposition of controls at the UK’s borders – threaten the hard-won peace in Northern Ireland, which was premised on open borders within Ireland, it also jeopardized Ireland’s frictionless trade with the rest of the EU, given that most Irish goods destined for the continent travelled by lorry across the “land bridge” of Great Britain.
Early on in the Brexit process, Irish officials in bilateral meetings sought assurances on the border question, but they were dismayed that their British counterparts did not seem to take it sufficiently seriously. This led the Irish government to make a diplomatic push to resolve the issue on a multilateral basis, as part of the broader EU-UK Brexit negotiations. This effort was vindicated in April 2017 when, at Ireland’s behest, the EU set the Irish border question as one of its top three priorities in the first phase the negotiations. These could only proceed to the second phase when “sufficient progress” had been made on the Irish border question – a condition met in December 2017 with an agreement on the so-called “backstop.”
The backstop was devised by negotiators as a means to resolve the border issue on a provisional basis. The UK preferred either, first, a comprehensive agreement on customs and trade or, second, technological solutions to resolve the issue, but it accepted, as a third option, that if all else fails the avoidance of a hard border would be mutually guaranteed. As originally conceived, it applied only to Northern Ireland, which would continue in “full alignment” with the rules of the Internal Market and Customs Union that support “North-South cooperation, the all island economy and the protection of the 1998 Agreement.” However, a quite different version of the backstop emerged in Theresa May’s Withdrawal Agreement of November 2018, which applied to the whole of the UK rather than just Northern Ireland. Under this deal, if the backstop were triggered, the UK would remain de facto in the EU’s Customs Union. Hard-core Brexiters in the Conservative Party objected to the backstop because it would impede the UK’s ability to forge an independent trade policy. This opposition contributed to the defeat of the Withdrawal Agreement in the House of Commons (three times) in early 2019, leading to Theresa May’s resignation.
Boris Johnson campaigned for and won the Conservative leadership and became Prime Minister in July 2019 on a promise to remove the backstop, but the EU (fully supporting the Irish position) refused to renegotiate the Withdrawal Agreement, leaving the Brexit process at an impasse, with the Irish border as the main sticking point. However, the deadlock was broken on October 10 when Leo Varadkar, the Irish Taoiseach (Prime Minister), held a private meeting with Boris Johnson and the two emerged saying that they could see a “pathway to a deal.” After this, the negotiations intensified, and one week later an agreement was reached on a revised Withdrawal Agreement.
The new agreement resolved the Irish border question in a way that more closely resembled the original backstop, that had applied only to Northern Ireland rather than to the whole UK. Northern Ireland would, for legal purposes, be in the UK’s customs territory but, for practical purposes, it would be in the EU’s Customs Union. This complicated arrangement would in practice allow the Irish border to remain entirely open, but at the same time would require a border in the Irish Sea, in the form of customs and regulatory checks. This new arrangement was enshrined in the Protocol on Ireland/Northern Ireland, part of the Withdraw Agreement.
The new agreement allowed Johnson to claim that he had fulfilled his promise, because the backstop had been replaced by a new arrangement for the Irish border. When he could not immediately get the new Withdrawal Agreement through the UK parliament, he called for a general election. In the election on 12 December, his Conservative party won a comfortable 80-seat majority. The Withdrawal Agreement was ratified by the UK parliament in January 2020, which enabled the UK to leave the EU on 31 January 2020. A new trade deal governing the future EU-UK relationship, the Trade and Cooperation Agreement (TCA), was negotiated throughout 2020, signed on 24 December and came into force on 1 January 2021, just as the post-Brexit transition came to an end. However, throughout 2021, even after Brexit was a fait accompli, the UK continued to backtrack on its commitment to uphold and implement the Protocol, and it threatened to use its safeguard clause (Article 16) to suspend the Protocol’s application. (In January 2021 the EU also threatened to invoke the protocol with regard to the distribution of vaccines, but withdrew the threat within hours.)
- Differentiated Governance
- Policy Differentiation
Ireland has a broad opt-out from several EU policies in the field of Justice and Home Affairs. It is not part of the Schengen area of passport-free travel; it opted out from Schengen together the United Kingdom (when it was still a member state) because the two countries are part of a Common Travel Area, which permits citizens of each to travel, live and work in the other. Ireland is one of the five current EU member states that opted out of joining the European Public Prosecutor’s Office. However, in March 2021 opted to join the Schengen Information System, which is a system for sharing information among police and border guards throughout the Schengen area.
- Intra-EU Differentiation.
Ireland is part of the New Hanseatic League, an informal group of eight Northern European member states that coordinate economic policy at the EU level.
- Territorial Differentiation.
Northern Ireland is a disputed territory that has a differentiated relationship with EU governance. It was the object of considerable controversy throughout the Brexit talks (see above) which were tentatively resolved by the Withdrawal Agreement, with the Northern Ireland Protocol. Northern Ireland remains part of the United Kingdom, but it remains partially within the EU Single Market (applying the EU rules as they apply to goods) and is de facto in the EU Customs Union (in that the UK agreed to apply customs checks on goods passing from Great Britain to Northern Ireland. This ongoing arrangement will be subject to a vote in the Northern Ireland Assembly in 2024.
- Covid-19 and the Recovery Fund
Covid-19 arrived in Ireland in late February 2020 when the first infection was confirmed and within three weeks had spread to every one of the country’s 26 counties. Over the following weeks and months, Ireland, like many other states, faced an existential crisis as transmission of the virus increased exponentially and the state was forced to put the country into ‘lockdown’ on 12 March. On 27 March 2020, the first ‘stay at home’ order was issued by the government, with all non-essential business and travel banned. Within weeks it became clear that Ireland’s social care model, centred on residential homes for older people, was taking the brunt of the Covid transmission.
Ireland presents as a paradox in any comparative analysis of how contemporary nation states managed the Covid emergency. On the one hand, the mortality rate from Covid in Ireland has been amongst the lowest in the EU27. There is solid evidence to suggest that the Covid crisis was managed relatively well by the Irish state. On the other hand, the experience of trying to manage the Covid crisis shone a light on many pre-existing weaknesses and fragilities within public policy and state structures, especially the health and social care spheres.
In July 2021, the EU endorsed Ireland’s recovery and resilience plan, which will lead to the disbursement of €989 million in grants to Ireland under the Recovery and Resilience Facility.
- Conference on the Future of Europe
The Conference on the Future of Europe was launched in May 2021 and is centred on a multilingual online platform. As part of the Conference, there will be four Citizens’ Panels, each made up of 200 citizens from across the EU. These will meet several times to discuss policy issues organized around four topics, one of which (the panel on “Stronger economy, social justice, jobs/education, youth, culture, sport/digital transformation”) will meet in person in Dublin in December 2021. The Citizens’ Panels are an experiment in deliberative democracy partly modelled on Irish experience of debating constitutional change in a Citizens’ Assembly. Despite these activities, the general public in Ireland has thus far taken little notice of the Conference on the Future of Europe.
