July 14, 2002

Enlargement to benefit Ireland

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In 1502, the year Columbus made his final trip to America, the map of Europe from Portugal to Moscow contained at least 30 sovereign states. Five hundred years later, if you discount Andorra and Switzerland, not one of those 30 states has maintained its separate sovereign existence.

Of the states in Europe today, four were constructed in the 16th century, four in the 17th, two in the 18th, seven in the 19th and no fewer than 36 in the 20th. The rise and fall of states is one of the most fascinating political phenomena of European history.

Over the years there have been a variety of different blueprints for sovereign states. In the Middle Ages, city-states such as Venice and Dubrovnik were maintained by sheer force of commerce and capital. And whereas states such as Russia were gelled together by violence and military might, France, Prussia and Britain came together using a combination of both commerce and violence.

Throughout history, money and violence have been the major driving forces in the construction and destruction of states. The longevity of any European state has been determined by its internal consistencies, particularly ethnic consistency and the ability of the state to navigate its way through the 100 or so wars in Europe since the Renaissance.

The key political questions surrounding the founding of states up until recently centred on “how a state made war?” or “how war made a state?”

The EMU project is different. It has dropped the war part in the construction of a super state and focused exclusively on the commercial approach to nation building.

It is helpful to look through this historical kaleidoscope when reviewing the plan for Europe as set down in Nice and other treaties that Ireland has signed since EEC accession. It is irrefutable that we are following a map that concludes in a full European state with centralised political power and a federal economic system.

When this happens is anyone’s guess, but to think that all this effort is being expended so that we can save the CAP, travel without a passport or have less hassle when importing tables from Italy is naive.

Jean Shuman and Claude Monet envisaged a European state and Bertie Ahern and Brian Cowen are doing their bidding. To conclude otherwise would be to suggest that all the effort on the part of the Commission, the Council and the European Parliament as well as our own national elite, has no endgame. This is hardly credible.

The introduction of the euro is a key cementing agent in the project. Violence has been ruled out, so cash will be king. Yet economics alone will not be enough. You can’t make a super state with a currency alone.

Eurosceptic historians on the continent and in Britain are fond of suggesting that the Nazis hatched plans for EMU. This is true but not particularly relevant and recent English efforts to tar the euro with a Nazi brush only reveal how little English comedy has travelled since Fawlty Towers.

It is a fact that in the summer of 1940, even before the infamous Wannsee conference, the German Reichbank drew up plans for making the Reichmark the common currency of an economic union under German military occupation in Europe. The plans came to nought. But this is nothing new.

Alexander the Great used a stable common currency to bind his Empire together, as did the British to keep the United Kingdom together. History tells us that money, backed by political will has always been used as a battering ram for nation or Empire building. Both these factors are in place in Europe at the moment.

This brings us to the second Nice referendum and further European integration. The performance of the pro-treaty forces this week indicates that they have learned nothing from their last defeat. Their message should be simple: Europe is and will continue to be good for Ireland.

However, as we get richer, more cantankerous and more proprietorial, the arguments in favour of increased integration become less clear-cut and need to be teased out a bit more.

People’s fears about sovereignty, immigration and competitiveness vis-a -vis Eastern Europe are understandable and should not be dismissed.

So the representatives of corporate Ireland and the government could do with being a bit more humble when advocating a `Yes’ vote. The people do not want to be told that voting `No’ is atavistic, simpleminded or backward.

In addition, some of the economic arguments proposing financial Armageddon if we vote no are unfounded.

It is equally galling to be lectured on economics and job creation from the likes of Sinn Féin, many of whose members tried to bomb this island back to the Stone Age in the 1980s, helping in no small measure to bring the economy to its knees.

The first thing the IDA had to do in the old days was convince US investors that the place was not a warzone. Although arguments about tax breaks and smart cheap labour might have been persuasive, they must have been obscured by the fact that the republicans were once given to kidnapping executives of multinational companies. Equally, the current Sinn Féin alternative to European integration is a combination of protectionism and snippets of Marxist mumbo jumbo, which befriends Fidel Castro and berates America.

If this was the blueprint for economic, financial and general prosperity then why are Poles, Hungarians and Czechs so poor and desperate to migrate west? Thus the No camp has serious questions to answer as well.

Migration will be the single most lasting impact of EU enlargement on Ireland. Eastern Europe will be to Ireland what Mexico is to California. Brian Cowen has said that from day one of accession, the Irish door will be open to immigrants to travel and work freely.

In contrast, Germany and Austria have slapped a seven-year moratorium on the free movement of labour and right to work.

The arrival of these new immigrants will be a boon for the Irish economy. American economists regard the availability of immigrant labour as one of the key factors in American prosperity. Go into any shop, restaurant or bar in Dublin and you see what they mean.

It is equated to a large tax cut across the economy as cheaper, freer labour reduces the cost of production. It is no surprise therefore that Ibec supports Nice as it will lead to a reduction in business costs.

Trade union support for Nice is more perplexing because the arrival of cheap labour from Eastern Europe will undermine the union’s leverage over employers. Why listen to the union when you can have a truckload of Latvians doing the same job for half the price?

Equally, many of the shortages in public services such as the health service from nurses to radiographers and laboratory technicians will disappear. A surplus of labour in some areas may also undermine benchmarking as certain salaries will fall rather than rise. For example, why pay Irish teachers €32 an hour to supervise when a fully qualified Estonian teacher will do it for the minimum wage?

Shortages in the construction industry will also be a thing of the past as Polish and Czech tradesmen take up the call. With cheap airfares soon to be the norm in Europe, many places in central Europe are only three hours away for as little as the train fare from Dublin to Killarney.

European enlargement will have a profound effect on Ireland. There will be winners and losers among the native population. If the rest of Europe tries to slow immigration while we do the opposite as Brian Cowen has indicated, we will continue to bridge the income gap between ourselves and the Germans and quite soon surpass them.

Ironically, we will achieve that by implementing American-style policies under the umbrella of EU enlargement. But the Yes vote, if it is to win, will have to explain this and be prepared to engage with the issues, rather than preaching from the pulpit. At the moment that does not look likely.