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Latest EU summit has no good news for Ireland

Yesterday, with no sense of irony, German Finance Minister Wolfgang Schaeuble was awarded a major prize for his contribution to European unity.

After just an hour's sleep, an exhausted David Cameron, British prime minister, returned to London from the EU summit in Brussels last Friday to a hero's welcome.

'Up Eurs' was the splash headline in the British edition of The Sun newspaper yesterday. 'Europe leaves Britain,' said the Telegraph. There he was -- the great Tory leader standing up against those awful interfering eurocrats, standing up for the City of London and defending the hard-pressed British taxpayer.

Cameron in total isolation opposed changes to the Lisbon Treaty without key concessions to protect the City of London financial market. Amid the anger and fury of his 26 fellow leaders, the British prime minister stood alone.

It's the kind of courage that we would so much like to see from our own leaders. Either way his steadfast refusal to join his fellow leaders meant they had to settle for an intergovernmental agreement, as opposed to a full EU treaty. So as a result we now have a non-EU creation to oversee EU budgetary rules. Yesterday, opinion formers throughout Europe questioned how viable such a structure would be legally.

Cameron is a pariah figure in Paris and Berlin this weekend. "He seemed to think he could come to a wife-swapping party without his wife," one French diplomat quipped.

Despite some prudent measures agreed last Friday, including closer fiscal union, tighter budgetary controls, and an acceleration of the EU's permanent bailout facility -- the European Stability Mechanism (ESM) -- to July 2012, there is already a sense that the deal will not be enough to end the chaos. And the absence of Britain illustrates once again the inability of political leaders to grasp the nettle effectively.

As a result, further crunch summits in the months ahead are likely. Already faced with an unrelenting eurozone crisis (largely of their own making), European leaders also are in a situation where the very future of the EU is in jeopardy.

"The outcome of the latest crisis summit has failed to address the underlying causes of the current crisis and may well have made matters worse by undermining the working of the European Union," Fianna Fail leader Micheal Martin said correctly.

The absence of Britain from this latest summit deal is being seen as the precursor of the break-up of the eurozone and it also raises grave questions for its closest trading partner -- Ireland.

We are Britain's fifth largest trading partner and we consume more British imports than Brazil, Russia, India and China combined. The value of imports and exports between the two countries runs to a colossal £1bn (€1.2bn) a week.

Speaking to the media in the immediate aftermath of the summit's conclusion, Enda Kenny insisted that Britain's opt-out would not affect Ireland's trade relationship.

"The UK is our biggest and nearest trading partner. But we are all covered by the single act here within the union that allows for that to continue, so we want it to continue and to expand."

I, for one, am not so sure that the Taoiseach can be as confident that our trading relationship won't be impacted upon. In truth, there are significant implications for every firm in Ireland which has trading links with the UK as well as those in the IFSC which operate as back offices for London.

While Britain looks set to be left behind, its isolation is of far more significance to us than most other countries in Europe. It is vital to establish what impact this new two-tier arrangement will have on our fragile economy.

Apart from the fresh British concern, Kenny has also lost significant ground with some of the other main agenda items. Ireland failed to gain any real traction on the request for a better deal on our bank debt burden. On the way in, the Taoiseach made a big play of outlining Ireland's difficulties but came away empty-handed.

Also, the possibility of another referendum is as welcome as a bout of smallpox to the Government, and there is once again the threat to our low corporation tax rate.

Overall, it is not an understatement that the summit has turned out to be a disaster for Ireland.

And rather than dragging the continent back from the brink of disaster, the events of the past few days raise more questions than they answer. And, with a currency crisis in full swing, that is not good news.

Sunday Independent