National Archives - Fears of crisis in aftermath of EEC membership

Documents suggest the Government considered import controls, writes Caroline O’Doherty.

SENIOR officials held a crisis meeting in the absence of their ministers in the belief that the Government was about to blunder into an illegal and devastating trade war with Ireland's European Economic Community (EEC) neighbours.

The meeting held to conjure up "the most plausible legal appearance" for such a move took place on June 20, 1975, six days before Finance Minister Richie Ryan was due to present measures to the Dáil to try to address the worsening economic crisis.

Much discussion had taken place, both publicly and privately, over the previous year about the impact of EEC membership on Irish manufacturers who had lost the protection of import controls. The Confederation of Irish Industries (CII) was particularly vociferous in demanding the reintroduction of protections for the textiles, clothing and footwear industries.

It was argued that these industries, which accounted for 21% of all manufacturing jobs, had lost 20% of their jobs since 1970.

Imports had risen from 22.7% of the home market to 43.9% of the home market in the same period.

Memos show the question of reverting to import controls through quotas or tariffs was considered repeatedly by the Government during this crisis and legal advice was sought on numerous occasions.

Repeatedly, the word came back that the Act of Accession, which Ireland had signed to join the EEC, meant "this country is no longer a free agent in the matter of imposing import controls".

Article 135 of the act did allow for "new countries to apply for authorisation to take protective measures to deal with economic difficulties, in particular sectors of industry during the transitional period".

In January 1975, however, a delegation from the EEC made it clear at a meeting in Dublin that "the commission was opposed to Ireland having recourse to Article 135 because this could provoke a snowball reaction from other member states".

Undeterred, the Government considered getting around the legalities through a 'Buy Irish' campaign even though it was acknowledged it would "certainly be contrary to the spirit of the EEC treaty".

The ITGWU urged the immediate introduction of protective measures "regardless of the attitude of our fellow-members of the community".

One Government adviser had his doubts, however. He noted that protectionism had been high in the 1950s but unemployment and emigration remained high then.

He also warned: "If Ireland were to break the obligations of membership of the EEC, then there is a serious risk that the UK would follow suit. This would impose costs to the economy far in excess of any benefits accruing from protective tariffs."

Despite the deluge of advice against reintroducing controls, the senior officials from the Departments of Finance, Agriculture, Industry and Commerce and the Attorney General's office, who met on June 20, clearly believed it was the Government's intention to make such an announcement.

"I attended a meeting at short notice this afternoon at which import restrictions were discussed," wrote official P Murphy, possibly Michael P Murphy, parliamentary secretary to the Minister for Agriculture.

"The meeting in effect tried to establish how to give the most plausible legal appearance to a decision to impose import restrictions which the Government was said to have taken."

There was discussion at the meeting as to how Ireland might argue it had been hit by a "sudden crisis", which would allow some protectionist measures to be adopted under EEC law, even though the crisis had been building gradually for some time.

It was also agreed to examine how Article 104 of the act which imposes on member states the duty to keep their economic houses in order might be invoked in defence of import controls.

The meeting, and Mr Murphy's note of it, led to a brief but stark warning by an adviser to the Minister for Finance, Richie Ryan.

"If the circumstances are as indicated in Mr Murphy's note, we will be in serious breach of our treaty obligations and I doubt that we can get away with it. Our action will be a serious blow to the community and will entail a price which at the moment we cannot calculate."

How close the Government came to introducing controls is not clear, although it would be strange for a group of senior officials to gather at short notice to work out a legal defence for the move if it was not being seriously considered.

Either way, Ryan replied to his adviser in a terse fashion. "Decision taken is on different lines and is totally in accordance with community laws."

He went into the Dáil on June 26 and presented a supplementary budget in which he announced subsidies for bus and rail fares, bread, flour, milk, gas and other heating fuels which he said lower prices and keep inflation down.

He also removed VAT from clothing, textiles and footwear.