Thursday 29 September 2016

Let's take a chill pill on Brexit - we could enjoy the best of both worlds if we play our cards right

Published 28/01/2016 | 02:30

British Prime Minister David Cameron and Taoiseach Enda Kenny at Downing Street this week. Photo: Chris Radcliffe
British Prime Minister David Cameron and Taoiseach Enda Kenny at Downing Street this week. Photo: Chris Radcliffe

Just before jumping headlong into the imminent General Election campaign, we must think deeply about Britain's EU referendum. A blind 'OMG' panic by Official Ireland at the prospect of the UK opting out of Europe seems to have taken root. Why has there been no time-out called to consider the benefits of Euro-scepticism?

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A federalist, integrated United States of Europe really doesn't suit us. Not when it comes with a common tax straitjacket. Not to mention centralised rule from Brussels, coupled with a shrinking of national parliaments.

As a small, peripheral state at the edge of the German hegemony, we have a chance to pore over what are increasingly less promising prospects for all peripheral members.

Europhiles never thought it would come to this. They presumed Labour would be part of Britain's government, with an SNP coalition option. Few thought that David Cameron's pledge in January 2013 to hold an in/out vote would ever materialise; Ukip failed to make a Westminster breakthrough (only one MP).

The British prime minister has given a hostage to fortune. This campaign has the capacity to tear the Conservative Party asunder.

Three ministers - Theresa Villiers (Northern Ireland), Chris Grayling (Commons Leader) and Iain Duncan Smith (Work and Pensions) - will all campaign for a pullout vote. They would have resigned if collective Cabinet responsibility wasn't waived. And the succession stakes for the post-Cameron era are also already in play. George Osborne and Boris Johnson are lining up on opposing sides. Philip Hammond and Michael Gove have Euro-sceptic DNA. Prominent backbenchers like Liam Fox are leading the charge for independence.

All eyes are now on the forthcoming EU summit slated for February 18/19. Mr Cameron will be presented with watered-down Tusk terms on the original four demands.

The sticking point apparently is the four-year deferral of welfare entitlements for migrants into the UK.

The 27 EU leaders appear to have seen David coming. The hand of cards he held had few aces. The bluff and bluster was never really going to cut it. The calculation has been that he'd ultimately advocate to stay in. With all the cards laid out face-up, the consensus may be he has overplayed his hand. The reality is that a face-saving protocol - not Treaty reform - is as much as he can hope for.

However ominous they may sound from across the channel, the threats to pull the UK out of Europe simply weren't taken too seriously by Frau Merkel. When the chips are counted, don't expect to see much return for the UK on new vetoes, further tax breaks, a dilution of the European Court of Justice, or any major reduction of migrant in-flows from other EU states.

In terms of a final deal, what will eventuate is likely to be minimal, even cosmetic.

The probability is that the Brexit referendum will be lost marginally.

The research to date reveals voter profiles showing how older, traditionalist, blue-collar males mostly favour independence.

The younger, professional cohorts veer towards the pro-Europe side. Scotland favours the status quo. However, the SNP may yet seize the moment to make another play for an independence referendum.

Paddy Power odds reflect a rejection: 2/5 stay; 7/4 leave. The opinion polls suggest a tight call, with 52pc favouring staying in.

Business leaders are the most vocal about hanging in there. British-Irish Chambers of Commerce are leading many business debates centring on mutual interdependence and an annual trade of €50bn.

The plain truth is that we have no control over the outcome one way or another. And if the Brits interfered in our Nice, Lisbon or Maastricht referendum debates, Irish voters would have been hopping mad, with a counter-productive response.

Irish political leaders would be well advised to respect the intelligence and autonomy of British voters. In any event, we would be better off reflecting on Ireland's best option if Brexit becomes a reality.

Our position is unique geographically, historically, culturally and emotionally.

We're not part of the Schengen area agreement or situated on the mainland continent of borderless Europe.

New unique Foreign Direct Investment job opportunities will present if Ireland is not only the sole English-speaking state in eurozone, but in the entire EU.

Assessments of the possible consequences for Ireland of a Brexit were the focus of an ESRI report last November. This concluded that there was a 20pc risk of a reduction in trade volumes. This would hit indigenous Irish firms more dependent on UK exports. One might also see: an indirect slump from reduced foreign direct investment in Britain; impairment of all-island electricity market; and more limited opportunities for Irish emigrants in the UK.

There is even the prospect of the re-imposition of passport and other controls at border checkpoints with the North. This all adds up to a very narrow, defeatist assessment of what has become an utterly intertwined Anglo Irish legacy, pre-Brexit. In my view, it is all so much rubbish.

Take a read of the book 'Britain and Europe: The Endgame - an Irish Perspective', published by the Institute of International and European affairs. It proposes that the British-Irish Council (established under the Belfast agreement) develop a special relationship of free trade between the two economies. We could refuse to re-establish border controls. The authors compares us to the Nordic Council involving Finland (in the eurozone), Sweden and Denmark (in the EU), Norway and Iceland (members of European Economic Area) and the Faroe Islands/Greenland (outside the EU Area). It facilitates special cooperation for mutual benefits. Import tariffs don't apply.

It's always smart and right to be the best possible next-door neighbour. In the first instance, we should act as both a go-between and benign honest broker on behalf of Britain to facilitate their remaining in the EU.

Many of Britain's frustrations with centralised bureaucracy and excessive red tape are valid. Britain is the best counterweight to excess authority inside the EU from the Franco-German dominant axis.

The UK is also the most prominent Free Trade advocate. Sterling continues to slide while a Brexit remains possible, to the detriment of our exporters.

Optimally, we need Britain inside the EU. Their exit won't entice ours - Irexit is not an issue. But it's not our choice.

We require a Brexit reality check. Under the Lisbon Treaty, two years of negotiation would ensue. The Brits will still want full access to 500 million EU consumers and won't jettison £148bn of EU exports - neither will the EU eschew 55 million Brits. Remember Britain has a trade deficit with the EU of £81bn. Relax. Take a chill pill.

We won't disconnect electricity inter-connectors overnight. Neither capital controls nor EU frontier police will imminently appear in Newry.

Ireland and Britain can cut a 'best of both worlds' post-Brexit deal to cement the Anglo-Irish 'special relationship', while we retain full EU membership entitlements. Irish cuteness and guile properly deployed diplomatically could exploit trade and investment opportunities.

Instead of scaremongering on the sidelines, we should start joint contingency planning, North and South, to maximise all-island income gains in tourism and trade over the next decade if Brexit becomes real.

Irish Independent

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