WORLD VIEW: topped two international lists this week, outpacing the rest of the EU in making the transition to the euro and coming first in an index of globalisation published in Foreign Policy magazine.By Paul Gillespie.
What is the relationship between them? And how can enthusiasm for the new currency be reconciled with the disenchantment registered in last June's rejection of the Nice Treaty?
Take up of the euro in Ireland has been extraordinarily smooth, reflecting a high level of national preparedness - technical, economic and political. The changeover operation was efficiently organised; but that job was made easier by the main economic actors' readiness for the change and a political willingness to accept the consequential pooling of sovereignty and identity.
There is little or no evidence that apparent scepticism about deeper integration shown in the Nice vote has spilled over into popular attitudes to the new currency, despite the noises on and off from doubting economists.
The globalisation index (based on data from 2000) may help to explain why this should be so. It was constructed using four sets of data: on economic integration; personal contact; technology; political engagement. Ireland came sixth in the previous index, based on 1998 data, so this positioning reflects remarkable changes in the intervening years of super growth.
Economic integration covers trade, foreign direct investment,portfolio capital flows, and cross-border incomes and receipts. The Foreign Policy commentary highlights Ireland's strong pro-business policies, English-speaking population, low corporate taxes and decision to join the euro as critical explanatory factors for the investment and trade flows that put it ahead of the Netherlands, Switzerland, Singapore, Finland, Sweden, Denmark, France, Spain and the United Kingdom in the list of the leading 10 countries for economic integration.
It underlines the dramatic growth in overseas direct investment from Ireland in recent years and the key role of the International Financial Services Centre.
IRELAND also comes first in the personal contact list, ahead of Singapore, Switzerland, Austria, Israel, Denmark, Canada, Sweden, the Netherlands and the Czech Republic. This is based on indices of international travel, tourism, telephone traffic and cross-border financial transfers.
It is hardly surprising that a State coming out on top of these two measures of globalisation should take so enthusiastically to the euro. That it will facilitate the level of internationalisation already achieved is clearly the popular assumption. That it can help to govern and regulate globalisation's impact on Ireland and Europe is also plausibly assumed.
The possible downsides pointed to by sceptical economists will await developments, such as the effects of a strengthening euro on Irish competitiveness; or growing pressure for fiscal harmonisation to accompany monetary union, which could also undermine competitive advantage.
Interestingly, Ireland does not figure in the top 10 lists of the two other indices used to construct the globalisation league table. The technology scores are based on the number of Internet users, hosts and secure servers, so we are not as developed as is often assumed in that respect.
This may be linked to other technological and educational lags which do not augur well for the next stage of economic development, which must be based more on autonomous research, high technology and infrastructural resources than on an industrialisation so dependent on FDI flows.
Nor do we figure on the list of the top 10 countries for political engagement. It is based on the number of international organisations and UN Security Council missions participated in and the number of foreign embassies hosted. France, Canada, the US, the UK, Sweden, Austria, Germany, Denmark, Finland and the Netherlands make up the list - many of then comparable in wealth and size to Ireland within the EU, but with much greater political involvement than ours, despite our strong UN record.
This comparative positioning may also be linked to wider problems involving Ireland's international role. It reflects a pattern of strong economic and weaker political engagement - which is also there in EU affairs. The number of embassies in Dublin has grown sharply, as has the quality of diplomats sent here improved in recent years; but Ireland still has less the half the number of embassies abroad as these other EU states.
In an era in which small states have to be smart to survive, it is increasingly clear that Ireland has a lot of catching up to do in political engagement. Increasingly, that will determine sustained economic success.
THE Nice result dramatically underlined this disjuncture between politics and economics. There was a real failure by political leaders to explain and justify the treaty, leaving the field to No campaigners many of whom oppose the globalisation on which Ireland's economic success has been predicated. Voters abstained in massive numbers or voted No in the belief that rejecting the treaty will be cost free for this State.
The growing realisation among the establishment that this is not so will make the next referendum into a campaign on whether Ireland wants to be in or out of the EU - and of globalisation. But scare tactics could easily backfire with voters who were shocked by Government's insistence that EU enlargement could proceed in spite of the vote and the acceptance by its 14 partners that this was so.
Many believe, therefore, that another vote on the issue would have to decide on a different package at domestic and/or EU levels by clarifying or amending the existing treaty. There is precious little political time to negotiate this or develop the case for Ireland's deeper political engagement, as an election looms and the deadline for ratifying the treaty by the end of the year approaches. The opportunity is clearly there in the Forum on Europe, the election campaign and the debate on the future of Europe beginning at the EU convention in March. But will political leaders rise to the task?
It is urgent and essential that they do if Ireland's prosperity and well-being are to continue into the next generation. EU membership and euro disciplines have been indispensable ingredients of the 1990s boom. But integration is becoming more political as the continent unites. What shape it should take to suit Ireland's interests best needs to climb far up the political agenda.
Clearly, too, voters are dissatisfied and worried about the loss of control involved in this process - and rightly so. There is a huge democratic deficit of explanation, debate and parliamentary control at national as well as transnational levels concerning these issues.
Nations are being Europeanised by the integration process and have the chance to get the balance right in the next treaty negotiation, which will engage citizens and civil society as well as politicians and diplomats.
That needs radical changes in Oireachtas scrutiny of EU legislation. It also requires the development of a European public sphere in which transnational politics can be conducted and choices made.