Cliff Taylor: A disjointed EU may not worry too much about Ireland

At an EU summit in Maastricht in February 1992, journalists were housed in what appeared to be concentric circles around the summit venue, with the big countries the closest. This put a motley Irish contingent of journalists well out of town, struggling to communicate with the local dialect as we tried to find the train into town.

It seemed an appropriate venue to discuss the next step forward in European unity, a Dutch city with a rich history, nestled at the centre of Europe, just on the border with Belgium.

Maastricht was the summit where EU leaders made the decisive step to set up the single currency, the euro. Led by German chancellor Helmut Kohl and French president François Mitterrand, they set what was, in effect, an irreversible course to the establishment of the single currency.

It wasn’t the EU’s last big step forward – that was probably the 2004 enlargement project which brought in much of eastern Europe. But now the EU, after many years moving forward, is on the defensive. This was evident during the economic crisis, of course, and now the era of economic nationalism means EU leaders are again reacting to events rather than shaping them.

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This is inevitable at times in politics, of course, but when leaders in both France and Germany are looking over their shoulders at the right wing in their own countries and the new populist Italian government– supported by countries such as Hungary, Poland and Austria – is laying down the law, you can see how things are changing.

Another hasty and unclear compromise on migration control may or may not stand the test of time. It may or may not be enough to save Angela Merkel.

Like the Brexit talks, the detail of managing migration flows and dealing with the extraordinary humanitarian challenges involves a whole host of detail and complexity. It is not something that can be sorted out over a bowl of soup at 3am.

Further integration

Against this backdrop, charting out Europe’s future is difficult, and plans for further integration look set to flounder.

Emmanuel Macron has set out a strategy to bring the euro zone economies closer together, essentially an attempt to move closer to finishing the job started in Maastricht all those years ago. But his plans for some kind of larger euro zone budget and a new powerful European Monetary Fund to oversee restructuring programmes will only gain any traction if Germany is fully signed up and even then will face significant opposition.

The rise of economic nationalism is in large part a reaction to the economic crisis, and ideas such as a larger euro zone budget and yet closer fiscal integration run counter to its central idea – even if the Macron plan in terms of a central budget is modest.

Plans to fully underwrite a common deposit insurance scheme across Europe, as a step to spread the risk from bust banks, are also hugely controversial.

While we are, understandably, worried about Brexit, for the rest of the EU this is now a real irritant

There are a few implications here for Ireland which go beyond whatever obligations we take on in relation to the migrant crisis.

The first is that we are dealing with a grumpy and disjointed EU, with politicians under domestic pressure. This may stop progress in some areas, but it means projects involving “wins” that can be sold to electorates may get a fair wind behind them. As Trump has shown us, we win, you lose is where it is at now.

Real danger

So we face real danger on the corporate tax front, where other countries are jealously looking at our mix of jobs and corporate tax revenue. While an initial plan for a digital tax may be in trouble, this topic isn’t going away and our overly-aggressive tactics over the years have left us exposed.

The second is that while we are, understandably, worried about Brexit, for the rest of the EU this is now a real irritant. Europe’s leaders have a lot of stuff to deal with, and the Brexit text at the summit was reportedly agreed in under a minute. As the talks run later and the eyes of EU leaders are elsewhere, Ireland’s fight to avoid a hard border is complicated, with no obvious solution and no clarity on who has promised what in the event of there being no deal on the Withdrawal Agreement.

Not only the Border, but Ireland’s entire trade with the UK stands exposed. The EU continues to offer us enormous support, but no solution is emerging which everyone is going to be able to sign up to.

And the final point, Europe’s likely posture of “what we have, we hold” also has implications for the Brexit talks. At a time when forward progress is difficult, Europe’s leaders will be protective of what is already there. Nowhere is this more evident than with the single market, one of the EU’s central achievements offering guaranteeing free movement of goods, capital, labour and people. Any UK attempt to seek membership of part of this market will be resisted as the big players argue it would undermine its integrity.

EU’s resilience

It would be a mistake, of course, to underestimate the EU’s resilience either. If we have learned one thing from the Brexit process it is that the links that have grown up across the union are of huge economic and social importance – not least the single market and the euro. Unpicking them is next to near impossible.

Back in 1992, as we drove to Maastricht, the Schengen agreement, first signed a few years earlier, had opened up the era of free passage across many EU borders, a wonder to the visiting Irish as we drove up from Brussels. Even this, some fear, may now be under threat as pressure grows to control migrant flows. The Irish Border will not be the only one in the spotlight in the months ahead.