August 3, 2015
United Ireland may not be as remote as it seemsPosted in Sunday Business Post · 116 comments ·
It’s the long weekend, which allows us time to kick back and maybe entertain some thoughts on where this economy of ours is going. Largely on the back of the strength of our two major trading partners, the US and Britain, our economy is growing.
As long as the euro remains weak and interest rates in the eurozone are at depressed crisis levels, the natural tendency of an economy to recover and grow should remain intact.
Most economists call this propensity for an economy to ebb and flow, the business cycle – I prefer to term it “human nature”.
We humans are not the rational creatures depicted in economics textbooks. On the contrary, we are highly irrational animals, susceptible to swings from optimism to pessimism. We are unbelievably influenced by our neighbours and prone to excitability as well as depression.
As a result when we become giddy, we become giddy together; and when we become pessimistic, this pessimism is infectious and we all become gloomy together.
This very human cycle between collective optimism and pessimism is the business cycle.
However, there are moments in an economy’s lifetime when big strategic decisions are taken which are influenced – but not determined – by the business cycle. These are big decisions which have enormous economic consequences. We are about to celebrate the anniversary of one next year, 1916.
The funny thing about these big events is the fact that most of them were unexpected. It is the job of historians to give them context, give them a plausible cause and give us a narrative, which makes sense of historical events.
The underlying reason for this is that we always want to feel that we are somewhat in control and we are in some way bounded by probability rather than improbability.
That’s also human nature. We humans, though irrational, like to equip ourselves with stories that have beginnings, middles and ends. These stories deem that big events are the “inevitable consequences” of something else.
But that’s actually not how the world works. For example, if this column was being written in August 1915 and it suggested that Russia – the least industrial big powerful country in Europe – was going to be overthrown and replaced by the thoroughly urban communists, you’d think this mad.
Had I said that the Austrian and Turkish Empires would disappear, you’d think me extreme. Or if I had suggested that an ultimately victorious Britain would, by 1921, lose more of its land mass than a defeated Germany, you’d have laughed at me.
Had I told you in 1915, when the Home Rule party was the only real mainstream nationalist party in Ireland, that by 1918 they’d only have one MP in the whole country, you’d have me committed.
But all this happened. And now we think it was all inevitable, but it wasn’t.
Strange things do happen.
Armed with that idea, let’s look out now from the vantage point of 2016 and ask whether we might have a united Ireland before any of us thought possible or (maybe even) desirable. Might we stumble into a united Ireland in the same way we stumbled, quite unexpectedly, out of the United Kingdom?
Before we head up the M1 to Belfast, consider first our relations with Brussels.
Over the past few months, in fact since the onset of the eurozone crisis, it appears incontrovertible that the EU has changed.
What has been dressed up as an economic conflict between debtors and creditors could also easily be seen as a cultural battle between the north and the south.
Certainly, that’s the way the popular press paints it and, in truth, most European citizens see it this way too.
Vastly different economic realities have pitted the north against the south, with France not too sure which way to go. Germany has indicated that it has had enough and intends to lead Europe in a more Germanic direction – which is fine for Germany.
However, one of the implicit promises of the European Union was an economic promise that if countries joined, they’d get rich.
Remember all the slogans in Ireland during referendums about the Holy Trinity of “growth, jobs and Europe”. The same promises were made all over Europe to electorates that bought that line. The understanding for poor countries was that the EU stood for prosperity and by definition therefore, national sovereignty stood for poverty.
Once you make these types of promises, even implicitly, you have to deliver. In recent years, the EU hasn’t and that’s one reason for today’s problems.
My hunch is that we will have recurring debt crises in the eurozone and we will see the core countries around Germany pulling away on their own. Simply put: not everyone can keep up with Germany. Those that can will stay with Berlin, and those that can’t will go elsewhere.
The EU could well split between a core zone around Germany, Austria, Poland, Slovakia, the Benelux and France, with a second Mediterranean group headed up by Italy and the Iberian countries.
We also have the small problem of Europe’s south-eastern corner from Athens to Ljubljana, including Greece, Bulgaria, Romania and the former Yugoslavian countries. What is going to happen there?
These economies are faltering; economic inequality is terrible and the EU promise remains as distant as ever. Can Germany carry these countries if it can’t carry Greece? What do you think?
This brings me to the semi-detached arc of these islands and Scandinavia. By not joining the euro, Britain, Sweden and Denmark have all signalled that they are happy to be semi-detached.
These are all rich trading countries and, with Norway, they constitute an independent bloc of sovereigns that seem less than enamoured with giving more to Europe. Could they form a looser free-trading bloc that actually doesn’t need German hegemony to give them hope?
Closer to home, if Britain has a referendum on the EU and the No side wins, it will trigger a series of events, leading to a federal Britain, not least because the SNP-driven Scots will not want to be in the present British structure outside the EU.
They will have two options: either go for a federal Britain or full independence rather than be dominated by England without Europe. However, if Europe is changing dramatically, riven by fractures and crises, joining a putative Atlantic/North Sea trading alliance with the Scandis might make sense.
Now what about us in this scenario?
As I write, I am looking at demographics in Northern Ireland from the 2011 census. The most interesting statistic shows the proportion of Catholic vs Protestant in various age groups. Of the over-90 population in the North, 64 per cent are Protestant and 25 per cent Catholic. A total of 9 per cent had no declared religion.
This reflects the religious status quo when these people were born in the 1920s and more or less reflects the realities of the Treaty.
Now look at the same figure for the under-4s, those children and babies born since 2008. This corresponding figure is 44 per cent Catholic and 31 per cent Protestant. In one (admittedly long) lifetime, the Catholic population in the youngest cohort has almost doubled, while the Protestant one has more than halved.
Even given the fact that 23 per cent of parents of infants declared themselves as having no religion, we seem to be en route to a united Ireland.
It may happen much quicker than you think in the context of a wider EU and UK realignment. If the UK, as we know it, were to break up, the willingness of England without Scotland to prop up the North may well change. And according to the Belfast Agreement, if they want a United Ireland, we can’t stop them.
Now wouldn’t that be something for the 1916 heroes to digest? A Northern Ireland that wanted reunification and a Republic that is petrified by the prospect?