Enda Kenny faces dilemmas in carving Ireland’s new seat at the EU

In the EU negotiations Enda Kenny faces a number of problems.

Most important of all is the North, from a political and economic perspective.

The carefully crafted political edifice of Stormont is a horrible mess. But compared to a low-grade civil war it is Plato’s Republic.

The core of the political settlement is that both sides accept each other as having multiple identities – European, Irish, British or both.

The war has stopped and the economy, if lopsided, is growing.

All of this is threatened by the pique of the English electorate. Any border with the EU and a non-EU country needs to be strongly and vigorously defended.

An area with freedom of movement of trade, money and people needs that. So the question is whether that will happen at Newry, and infuriate the nationalists, or at Larne, with the unionists infuriated.

Having campaigned, for some inexplicable reason for Brexit, the DUP should logically seek a hard land border.

This is not going to happen. But a UK which ran from the EU for fear of migrants will need a hard frontier, so it has to be at the point of exit of Northern Ireland.

It gives the lie to the statement that the North is as British as Finchley.

A Northern Ireland that remains in the residual UK will become poorer and more violent. There is not a chance that a hard right government will replace the quantum of EU funds.

The poorer the state, the greater the risk that the embers of conflict will be reignited. So what is Enda to do?

Secretly, the notion of a united Ireland terrifies many in the south. Economically, it would add to the mess we are still in. Keeping the lid on and reducing the heat via economic development is key in any negotiations around Brexit.

The old ideas of a federal Ireland may need to be brushed down. In that event, it must be made clear to the EU that large structural funds are needed.

The common travel area is perhaps the next most important issue. It is important not just because of travel — try getting off this island without some sort of official ID — but because of work.

Leaving aside the border, there is not a single Irish family who has not had a significant experience of life in the UK labour market.

The reality is that since independence the two islands have operated as part of the same labour market. This has been the saviour of Ireland.

This more than anything has been why we have not had riots in the streets.

Our disaffected and under-employed youth merely had to get on the boat or plane to the UK. They go to London and Manchester.

There they were able to work and live in an environment that offered more opportunities. The pressures that would have built up on socioeconomic reform were lessened.

Despite opportunities across the EU, any barriers to travel and to work in the UK would be a cultural shock, as well as an economic one.

It cuts both ways of course. An open border would allow for migration of British people out of the UK to the EU.

How can Enda negotiate a special deal when larger and more important countries are being poorly treated?

There are nearly twice as many Poles in the UK as Irish. What message will it send if we align with the argument that the Irish are different? More to the point, what will our European partners want in return?

The IDA has for decades been successful in attracting foreign direct investment. A part of the success has been down to the attractive tax package which we have been able to maintain.

It is important to realise that the headline corporation tax rate is only a part of this. But Ireland has other lures: We are now the only English speaking nation in the EU, a good beachhead for same, with a well-educated and productive workforce.

None of those attractions has quite the resonance internationally as a low tax rate.

A number of European countries have made no secret of the fact that they see this tax system as predatory and want it gone.

So we want to be in a EU which has a single market for goods and services and at the same time to be in a single market; we want free movement of peoples between Ireland and a country which has withdrawn from the EU because of free movement of people; and we want to maintain our perceived predatory tax regime for corporates which annoys so many.

We want our cake and to eat it, and eat it again. We can’t. Can we?

Brian Lucey is professor of finance at the School of Business, Trinity College Dublin.

More on this topic

Three weeks to finalise plans at ports for Brexit checks – official warnsThree weeks to finalise plans at ports for Brexit checks – official warns

EU accused of ‘wishful thinking’ over claims UK set to compromise in trade talksEU accused of ‘wishful thinking’ over claims UK set to compromise in trade talks

Stormont executive fails to agree position on Brexit extensionStormont executive fails to agree position on Brexit extension

Brexit transition uncertainty ‘poses threat to stability in Northern Ireland’Brexit transition uncertainty ‘poses threat to stability in Northern Ireland’