How the Celtic Tiger was tamed

As Ireland heads to the polls, it expects not change but more of the same.

If all the talk of treason in Dublin were in earnest, there would be nooses dang­ling from the Georgian lamp posts around the Dail instead of general election posters. There are no lynch mobs along the banks of the Liffey and the worst financial crisis in southern Ireland since the founding of the Free State doesn't seem to be bringing about the kind of large-scale realignment that the Irish left has been longing for.

Forget "Guns'n'Roses", as a Sinn Fein-Labour coalition was nicknamed when a single rogue opinion poll suggested such a mould-breaking possibility. For all his gung-ho rhetoric about triumphing over the two big tribal parties, the Labour leader, Eamon Gilmore, now has a struggle on his hands to play any role in the next government. Instead of making history, the most he can hope for is to become a Hibernian version of the Liberal Democrat leader-turned-Deputy Prime Minister Nick Clegg - and he might be denied even that dubious achievement if a resurgent Fine Gael can muster a majority with the aid of independents.

Although Gilmore has accused the outgoing Taoiseach, Brian Cowen, of "economic treason", the Labour leader is unlikely to pursue retribution if he becomes Tanaiste (deputy Taio­seach). A politically connected golden circle of investors seems always to be protected, even in times of socio-economic carnage. Most people in Ireland can't imagine this ever changing. Meanwhile, mass emigration is acting as a safety valve for social unrest. A new exodus from the country is one of the very few reasons that the number on the dole has yet to reach half a million.

Following the €85bn EU/IMF bailout, many have become exercised about the issue of economic sovereignty. The most that Fine Gael's leader, Enda Kenny, promises is that, if he becomes Taoiseach on 25 February, he will try to negotiate a less onerous interest rate with the European Central Bank (ECB). But its president, Jean-Claude Trichet, has already publicly slapped him down for this. Alan Dukes, a former Fine Gael leader who is now chairman of Anglo Irish Bank, has added to Kenny's woes by indicating that the country's banking system will need a further €15bn on top of the €35bn already earmarked.

If the Irish Labour Party becomes the junior partner in a Fine Gael-led coalition that spends even more public money while implementing savage cuts in front-line services and social welfare payments at the behest of the ECB and the IMF, it will not be able to avoid becoming as loathed as Britain's Lib Dems. And if they fall into the same trap, Dublin's social democrats could end up following the Green Party, which fears electoral annihilation as punishment for propping up the outgoing Fianna Fail-led government. Even ardent ecologists find it hard to lament that prospect. Despite securing two of the ministerial portfolios that they most coveted - energy and environment - the Greens failed to tackle a national betrayal that straddles both these crucial spheres.

The great giveaway

The Corrib gas controversy concerns plans by Shell, Vermilion Energy and Statoil to exploit the hydrocarbon reserves off the Irish coast, whose total value is estimated by the government to be €420bn. It involves not just a rejection of local public safety concerns but also a sell-off of the nation's natural resources.

When Eamon Ryan first entered the Dail, the charismatic young politician, once hailed as the great Green hope, campaigned for the Rossport Five, a determined group of local demonstrators who were prepared to go to prison to halt the construction of a gas pipeline through their village in County Mayo. When Ryan became Ireland's energy minister, however, he seemed to forget this pledge of solidarity and failed to use his influence to prevent planning permission from being granted for an onshore, rather than offshore, refinery.

Furthermore, over the coming decades, as the Corrib gas starts to thunder through the pipe, the almost insolvent Irish state will not receive a single cent in royalties. And when the likes of Shell do eventually declare any profits, they will be taxed at just 25 per cent, compared to the international average of 68 per cent imposed by energy-producing countries.

In 1987, Ireland's then minister for energy, Ray Burke, granted multinational corporations terms and conditions that few other countries would have stood for - including the abolition of royalties - purportedly to encourage gas exploration. Dick Spring, who was then Lab-our leader, is said to have denounced Burke's deal as "an act of economic treason". Burke was later jailed for offences relating to tax evasion. Little attempt has been made by any subsequent government to rescind his great gas and oil giveaway.

To cap it all, it emerged recently that a British undercover agent had been given free rein by the Irish police to infiltrate the Corrib protest groups. Mark Kennedy of the Metropolitan Police posed as an eco-warrior called Mark Stone while on the payroll of the UK National Public Order Intelligence Unit; he has claimed that he was commissioned in Dublin to do so. It seems that, when it comes to safeguarding the interests of international capital, Ireland's national sovereignty can be breached not just by the IMF but also by the British police and equally unaccountable elements within the Irish state.

Rob Brown is senior lecturer in journalism at Independent College Dublin

This article first appeared in the 21 February 2011 issue of the New Statesman, The offshore City

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The English Revolt

Brexit, Euroscepticism and the future of the United Kingdom.

English voters have led – some would say forced – the United Kingdom towards exit from the European Union. Was this an English revolt, the result of an ­upsurge over decades of a more assertive, perhaps resentful, sense of English identity? At one level, clearly so. Surveys indicate that individuals who most often describe themselves as “English”, and regions where this is common, were more inclined to vote Leave on 23 June. Some of these are poorer regions where marginalised people think that their voices are more likely to be heard in a national democracy than in an international trading bloc, and for whom patriotism is a source of self-respect. But it would only make sense to regard Leave as essentially an English reaction if discontent with the EU were confined to England, or specifically linked with feelings of Englishness.

In fact, negative opinions about the EU, and especially about its economic policy, are now more widespread in other countries than they are in England. Polls by the Pew Research Centre last month showed that disapproval of the EU was as high in Germany and the Netherlands as in Britain, and higher in France, Greece and Spain. Though aggravated by the 2007-2008 crash and enforced policies of austerity, a decline in support was clear earlier. France’s referendum of May 2005 gave a 55 per cent No to the proposed EU constitution after thorough debate, and a now familiar pattern emerged: enthusiastic Europeanism was confined to the wealthiest suburbs and quarters of Paris, and the only professional groups that strongly voted Yes were big business, the liberal professions and academics.

Going far beyond the atavistic and incoherent English revolt that some think they discern, our referendum result is partly a consequence of transnational political phenomena across the democratic world: the disaffection of citizens from conventional politics, shown by falling turnouts for elections, shrinking party membership and the rise of new, sometimes extreme political movements; as well as the simultaneous detachment of a professional political class from civil society, and its consequent retreat into a closed world of institutions.

The EU embodies these phenomena in uniquely acute form. In several cases its central bodies have opposed – or, if one prefers, have been forced to deny – democratically expressed wishes. In Greece and Italy, the EU has enforced changes of government and policy, and in Denmark, Ireland and the Netherlands it has pressed countries to ignore or reverse popular referendums. Its own representative body, the European Parliament, has gained neither power nor legitimacy. Crucial decisions are taken in secret, making the EU a hiding place for beleaguered politicians as well as a source of lavish financial reward for insiders. In the words of the historian John Gillingham, Europe is now being governed by neither its peoples nor its ideals, but by a bank board. This is not the “superstate” of Eurosceptic mythology. Though it drains power and legitimacy away from national governments, it is incapable of exercising power effectively itself, whether to cope with short-term emergencies such as an inflow of refugees, or to solve chronic failings such as the creation of mass unemployment in southern Europe. The result is paralysis, the inability either to extricate itself from failing institutions or to make them work.

If popular discontent with the EU continues to increase (and it is hard to see how it could not) sooner or later there will be some unmanageable political or social crisis. The response of too many supporters of the EU is to screw the lid down tighter, including now by promising to make life difficult for the United Kingdom, pour décourager les autres. This is the organisation – unpopular, unaccountable, secretive, often corrupt, and economically failing – from which our decision to depart apparently causes people to weep in the streets.

***

Why this decision? Why in Britain? The simplest and perhaps the best answer is that we have had a referendum. If France, Greece, Italy and some other countries had been given the same choice, they might well have made the same decision. But of course they have not been and will not be given such a choice, barring severe political crisis. This is most obviously because countries that have adopted the euro – even those such as Greece, for which the IMF has predicted high unemployment at least until the 2040s – have no clear way out.

I make this obvious point to emphasise that the immediate explanation of what has happened lies not only and not mainly in different feelings about the EU in Britain, but in different political opportunities and levels of fear. The contrasting votes in Scotland and Northern Ireland have particular explanations. Scottish nationalists – like their counterparts in Catalonia – see the EU as an indispensable support for independence. Northern Ireland sees the matter primarily as one affecting its own, still tense domestic politics and its relations with the Republic. In a European perspective, Scotland and Northern Ireland are the outliers, not England and Wales. Indeed, Scotland’s vote makes it stand out as one of the most pro-EU countries in Europe. If ever there is another referendum to see whether Scots prefer the EU to the UK, it will show whether this level of support for the EU is solid.

If England is exceptional, it is not in its disaffection from the EU, nor in the political divisions the referendum vote has exposed (if France, for instance, had such a vote, one could expect blood in the streets). Rather, its exceptional characteristic is its long-standing and settled scepticism about the European project in principle, greater than in any other EU country. Every ­member has a specific history that shapes its attitude to the theoretical idea of European integration. As John Gillingham, one of the most perceptive historians of the EU, describes its beginnings: “to the French [supranationalism was] a flag of convenience, to the Italians it was preferable (by definition) to government by Rome, to the Germans a welcome escape route, and to the Benelux nations a better choice than being dominated by powerful neighbours”.

Subsequently, for the eastern European states, it was a decisive step away from communist dictatorship, and for southern Europe a line drawn under a traumatic history of civil conflict. There is also a widespread belief, powerful though fanciful, that the EU prevents war between the European states. All these are important reasons why there remains considerable support for unification as an aspiration. But all these reasons are weaker, and some of them non-existent, in Britain, and especially in England. The simple reason for this is that Britain’s experience of the 20th century was far less traumatic. Moreover, during that time loyalty to the nation was not tarnished with fascism, but was rather the buttress of freedom and democracy. Conversely, the vision of a European “superstate” is seen less as a guarantee of peace and freedom, and rather as the latest in a five-century succession of would-be continental hegemons.

Given all this, an obvious question is why the United Kingdom ever joined in the European project in the first place. The answer helps to explain the country’s subsequent lack of enthusiasm. Its first response to the creation of the European Economic Community in 1957 was not to join, but to agree to establish a separate European Free Trade Association (Efta) in 1959 with Austria, Denmark, Norway, Portugal, Sweden and Switzerland; over the next three decades the seven founder members were joined by Finland, Iceland and Liechtenstein. This worked efficiently, cheaply and amicably, and, in time, Efta and the EEC would doubtless have created trading arrangements and systems of co-operation. But then the historic mistake was made. Efta was considered too small to provide the diplomatic clout craved by Whitehall at a time of severe post-imperial jitters. A cabinet committee warned in 1960 that “if we try to remain aloof from [the EEC] – bearing in mind that this will be happening simultaneously with the contraction of our overseas possessions – we shall run the risk of losing political influence and of ceasing to be able to exercise any real claim to be a world Power”.

Besides, Washington disliked Efta as a barrier to its aim of a federal Europe, and the Americans put heavy pressure on London to apply to accede to the Treaty of Rome, which it duly did in August 1961. “It is only full membership, with the possibility of controlling and dominating Europe,” wrote an optimistic British cabinet official, “that is really attractive.”

As the former US secretary of state Dean Acheson (one of the early backers of European integration) put it, in a now celebrated comment in December 1962: “Great Britain has lost an empire, and has not yet found a role. The attempt to play a separate power role . . . apart from Europe . . . based on a ‘special relationship’ with the United States [or] on being the head of a ‘Commonwealth’ . . . – this role is about played out.”

Acheson’s words long haunted British policymakers; perhaps they still do. And yet Britain remains one of the half-dozen strongest and most assertive states anywhere in the world, just as it has been for the past three centuries.

To fear of diplomatic marginalisation was added fear of economic decline. A government report in 1953 warned of “relegation of the UK to the second division”. Over the next 30 years there was a chorus of dismay about “the sick man of Europe”. Belief that EEC membership at any price was the only cure for Britain’s perceived economic ills became the orthodoxy in official circles: Britain was “the sinking Titanic”, and “Europe” the lifeboat.

So, on 1 January 1973 Britain formally entered the EEC with Denmark and Ireland. Other Efta members remained outside the Community – Switzerland and Norway for good. Harold Wilson’s 1975 referendum on whether to stay in the EEC in effect turned on Europe’s superior economic performance – which, though no one realised it at the time, had just ended.

This memory of apparent British economic weakness half a century ago still seems to weigh with older Remainers. Yet it was based on a fundamental misconception: that European growth rates were permanently higher than in a supposedly outdated and declining Britain. In reality, faster growth on the mainland in the 1950s and 1960s was due to one-off structural modernisation: the large agricultural workforce shifted into more productive industrial employment. From the mid-1940s to the early 1970s this gave several European countries “windfall growth” at a higher rate than was possible in Britain, which since the 19th century had had no large agricultural sector to convert. By the early 1970s, once that catching up was finished, European growth rates became the same as, or slightly lower than, Britain’s. When measured over the whole half-century from 1950 to 2000, Britain’s economic performance was no different from the ­European norm. By the mid-1980s, growth was faster than in France and Germany, and today Britain’s economic fundamentals remain strong.

Slower European growth lessened the perceived attractiveness of EU integration. In 1992, on Black Wednesday (16 September), hesitant participation in the European Exchange Rate Mechanism led to forced devaluations in Finland, Sweden, Italy, Spain and, finally, Britain. This was a huge political shock, though an economic boost.

Black Wednesday subsequently made it politically difficult for Britain to join the eurozone – allowing us a narrow escape, attributable more to circumstance than to policy, as vocal political and economic lobbies urged joining.

Moreover, Britain’s trade with the rest of the EU was declining as a proportion of its global activity: as Gordon Brown observed in 2005, 80 per cent of the UK’s potential trade lay outside the EU. The EU’s single market proved not very effective at increasing trade between its members even before the crash of 2007-2008, and prolonged austerity thereafter made it stagnant. Consequently, in the 2016 referendum campaign, more emphasis was placed on the dangers of leaving the single market than on the precise benefits of being in it.

But the days when Britain seemed the Titanic and Europe the lifeboat were long gone. On the contrary, Britain, with its fluid and largely unregulated labour market, had become the employer of last resort for the depressed countries of the eurozone. The sustained importation of workers since the 1990s had become, for a large part of Britain’s working class, the thing that most obviously outweighed whatever legal or economic advantages the EU might theoretically offer.

***

What galvanised the vote for Brexit, I think, was a core attachment to national democracy: the only sort of democracy that exists in Europe. That is what “getting our country back” essentially means. Granted, the slogan covers a multitude of concerns and wishes, some of them irreconcilable; but that is what pluralist democracy involves. Britain has long been the country most ­resistant to ceding greater powers to the EU: opinion polls in the lead-up to the referendum showed that only 6 per cent of people in the UK (compared to 34 per cent in France, for instance, and 26 per cent in Germany) favoured increased centralisation – a measure of the feebleness of Euro-federalism in Britain.

In contrast, two-thirds wanted powers returned from the EU to the British government, with a majority even among the relatively Europhile young. This suggests a much greater opposition to EU centralisation than shown by the 52 per cent vote for Brexit. The difference may be accounted for by the huge pressure put on the electorate during the campaign. Indeed, arithmetic suggests that half even of Remain voters oppose greater powers being given to the EU. Yet its supporters regard an increase of EU control over economic and financial decisions – the basics of politics – as indispensable if the EU is to survive, because of the strains inherent in the eurozone system. This stark contradiction between the decentralisation that many of the peoples of Europe – and above all the British – want to see and the greater centralisation that the EU as an institution needs is wilfully ignored by Remain supporters. Those who deplore the British electorate’s excessive attachment to self-government as some sort of impertinence should be clear (not least with themselves) about whether they believe that the age of democracy in Europe is over, and that great decisions should be left to professional politicians, bureaucracies and large corporations.

Some have dismissed the Leave vote as an incoherent and anarchic protest against “the establishment”, or as a xenophobic reaction against immigrants. Some of the media in Britain and abroad have been doing their best to propagate this view. Yet xenophobia has not been a significant feature of British politics since the 1960s, and certainly far less so than in many obedient EU member states, including France, Germany, Greece and the Netherlands. As for the anti-establishment “revolt”, this emerged when parts of the establishment began to put organised pressure on the electorate to vote Remain. Would-be opinion-formers have hardly covered themselves in glory in recent weeks. They have been out of touch and out of sympathy with opinion in the country, unwilling or unable to engage in reasoned debate, and resorting to collective proclamations of institutional authority which proved embarrassingly ineffective.

Worst of all, their main argument – whether they were artists, actors, film-makers, university vice-chancellors or prestigious learned societies – was one of unabashed self interest: the EU is our milch-cow, and hence you must feed it. This was a lamentable trahison des clercs. The reaction to the referendum result by some Remain partisans has been a monumental fit of pique that includes talking up economic crisis (which, as Keynes showed, is often self-fulfilling) and smearing 17 million Leave voters as xenophobes. This is both irresponsible and futile, and paves the way to political marginalisation.

The Queen’s call for “deeper, cooler consideration” is much needed. I recall Victor Hugo’s crushing invective against French elitists who rejected the verdict of democracy, when in 1850 he scorned “your ignorance of the country today, the antipathy that you feel for it and that it feels for you”.

This antipathy has reduced English politics to a temporary shambles. It is too early to say whether there will be some realignment of the fragments: One-Nation Toryism, Conservative neoliberalism, “new” and “old” Labour, the hibernating Liberal Democrats and Greens, the various nationalists and, of course, the unpredictable Ukip. When in the past there were similar crises – such as Labour’s rift over the national government in 1931, the Liberals’ split over Irish home rule in 1886, or the Tory fragmentation over the repeal of the Corn Laws in 1846 – the political balance was permanently changed.

***

Many Europeans fear that a breakdown of the EU could slide into a return to the horrors of the mid-20th century. Most people in Britain do not. The fundamental feature of the referendum campaign was that the majority was not frightened out of voting for Leave, either by political or by economic warnings. This is testimony to a significant change since the last referendum in 1975: most people no longer see Britain as a declining country dependent on the EU.

A Eurobarometer poll in 2013 showed that Britain was the only EU member state in which most citizens felt that they could face the future better outside the Union. Last month’s referendum reflected this view, which was not reversed by reiterated predictions of doom.

In retrospect, joining the Common Market in 1973 has proved an immense historic error. It is surely evident that we would not have been applying to join the EU in 2016 had we, like Norway or Switzerland, remained outside it. Yet the political and possibly economic costs of leaving it now are considerable. Even though discontent with the EU across much of Europe has recently overtaken sentiment in Britain, Britain is unique, in that, ever since the 1970s, its public has been consistently far less ­favourable to the idea of European integration than the electorate in any other country. Hence the various “opt-outs” and the critically important decision to remain outside the euro.

Now, by a great historic irony, we are heading towards the sort of associate status with the EU that we had in the late 1960s as the leading member of Efta, and which we could have kept. Instead, this country was led by its political elite, for reasons of prestige and because of exaggerated fears of national decline and marginalisation, into a vain attempt to be “at the heart of Europe”. It has been a dangerous illusion, born of the postwar declinist obsession, that Britain must “punch above its weight” both by following in the footsteps of the United States and by attaching itself to the EU.

For some, money, blood and control over our own policy were sacrifices worth making for a “seat at the top table”. This dual strategy has collapsed. In future we shall have to decide what is the appropriate and desirable role for Britain to play in the world, and we shall have to decide it for ourselves.

Robert Tombs is Professor of French History at Cambridge University. His most recent book is “The English and Their History” (Penguin)

This article first appeared in the 21 July 2016 issue of the New Statesman, The English Revolt