This was a very brave move for Ireland and one that subsequently caused many problems during periods of sterling weakness in particular. Two days after my son finishes his Leaving Cert, another potentially momentous development for Ireland in terms of its relationship with the UK could occur.
On June 23 the UK electorate will go to the polls to decide if Britain should remain a part of the EU, which it has been since Ireland joined in 1974. If the UK electorate votes to leave the EU, it could have potentially significant implications for Britain, the EU and Ireland.
An interesting question to pose is why David Cameron pledged to hold such a referendum in the first place. The obvious answer is to silence ‘pesky eurosceptics’. Ever since the UK joined the EU it has had a very shaky relationship with the system. Indeed, the shaky relationship with Europe dates back much longer than that.
For the Tory party in particular, the relationship with Europe has been a constant thorn in the side of the party. The fact is that the Tory party has been and continues to be deeply divided by the European question.
The anti-EU brigade in the Tory party and indeed in broader UK society have a strong sense of the former might of the British Empire and yearn for the country to re-attain its previous position of power in global affairs.
They tend to believe that EU membership has weakened the country and, hence, should be concluded.
There is also the more real opposition to the regulations that emanate from Brussels, and the contribution that the UK makes to the EU budget. It is argued that leaving the EU would allow the UK to become powerful again; free itself from the shackles of EU regulation; and free up money to be used domestically.
In reality, it is far from clear that a decision to leave the EU would achieve any of those objectives.
Brexit would not be good for UK trade. It is estimated that 47% of UK exports go to EU countries, and just 7% of EU exports go to the UK.
Hence, the EU market is much more important to the UK than vice-versa. The UK makes a gross contribution of £20 billion (€16bn) to the EU budget, but receives £10bn from the EU in agricultural and other payments.
If the UK electorate were to vote to leave the EU, a process of negotiation would begin to determine what sort of relationship the UK would have with the EU henceforth.
This process could take many years. Options could include Norway, Switzerland or Canada. Norway has access to the EU market through the European Economic Area (EEA), but has to sign up to many of the regulations of the Single European Market (SEM) and has to make a contribution to the EU budget, equivalent to 90% of the UK contribution per capita.
Switzerland has access to the EU market through a series of bi-lateral trade deals, but pays a contribution equivalent to 50% of the UK contribution per capita, and also has to sign up to many of the SEM regulations. Canada has just agreed a trade deal with the EU after seven years of negotiation.
However, it does not include services (which would be a particular problem for the UK) and some goods.
It is not clear what sort of relationship would be negotiated with the EU, but it is clear that if the UK wanted access to the EU market, which presumably it would, it would still be bound by many of the regulations and financial commitments that it is in theory trying to break free from.
There is also considerable concern for UK agriculture, as it would lose CAP payments.
If the electorate does decide to leave the EU, it would cause immense short-term problems for the UK economy. The longer-term consequences would depend on the type of trade deal agreed. The French, in particular, would hardly be in a mood to give the British too many concessions.
Quite frankly, the Brexit proponents do not make a lot of sense. Next week, I will consider the possible implications for Ireland and the EU.