The British referendum has triggered not only a political and economic crisis for Ireland's bilateral relationship with Britain. It also has profound ramifications for Ireland's position within the European Union.
Ever since Ireland and Britain joined the European Economic Community together in 1973, the two countries have been closely aligned at the EU table.
With the notable exception of agriculture, where Britain has been a strong critic of the Common Agricultural Policy (CAP), Ireland and Britain have been ideologically aligned, part of a looser band of northern member states including the Netherlands, Luxembourg and the Nordic countries which share a broadly free-trade perspective.
Britain’s departure has cut at the heart of that system of alliances.
Important bridge
One impact of the departure of the EU’s second-largest member – which so often acted as a counter-weight to Franco-German dominance – is a more protectionist EU, looking inwards instead of west. With EU-US relations at an all-time low among tensions over Brussels’ clampdown on corporate tax and digital privacy, Britain and Ireland formed an important bridge for transatlantic relations.
More specifically, the UK referendum has specific ramifications for Ireland. Ireland, along with Malta, will not only be the only English-language member of the EU, but the only country with a common law system. This apparent technicality has implications for the way in which EU legislation interacts with national systems. Sharing technical expertise and advice on the issue has informed British-Irish relations in Brussels for decades with Britain, as the larger country, often offering support to Ireland on the issue.
The British departure means that Ireland’s staff in the Permanent Representation to the EU in Brussels will no longer have access to this resource. Numerous other questions now arise for Ireland as it faces an uncertain future in the European Union without its traditional ally by its side.
Energy is one legal minefield. Ireland imports most of its gas from the United Kingdom and suffers low energy connections with mainland Europe. With a push for an "energy union" at EU level, could Ireland be subject to higher energy costs if it continues to import energy from a non-EU country?
British secession will have huge implications for the EU budget. The country’s budget contributions are likely to be reallocated as Brussels tries to fill the hole left by Britain’s £10 billion annual contribution. A mid-term review of the seven-year multi-annual financial framework which sets out the EU’s medium-term economic plan until 2020 is due to take place by the end of the year. A decision on the 2017 budget had also been expected this month.
The changes to the EU budget will have knock-on effects on agricultural subsidies and the CAP, one of the most tangible benefits of EU membership for Ireland.
Even before the British exit there was pressure on the agriculture budget. The proportion of the EU budget spent on agriculture had been diminishing in each budgetary cycle, though agriculture subsidies still represents around 38 per cent of EU spending. While in one sense the British departure means that one of CAP’s fiercest critics has left the room, the pressure on budgetary resources that will arise from the absence of a long-term net contributor to the EU budget will impact the amount of money in the pot available for direct subsidies.
State aid
Other unknowns include the applicability of EU state aid and competition rules to Britain, with Ireland keen to ensure that Britain does not benefit from any unfair tax or competition advantage. Aviation policy is another worry. Britain may have to negotiate access to the EU’s common aviation area, which allows any airline owned by nationals of an EU member state to operate in the EU without restrictions, though the system is also open to non-EU countries such as
Norway
and
Macedonia
. As an island country operating one of world’s biggest international air routes between London and Dublin, Ireland is particularly exposed as Britain seeks to ensure easy access to the common aviation area.
Perhaps the most important fallout for Ireland will be the forthcoming trade negotiations between Britain and the EU 27 as some form of bespoke trade agreement is worked out for Britain. The negotiations are likely to be led by civil servants from each EU member state in Brussels, many of whom are already seconded from different government departments to each Permanent Representation (the official term for EU embassies) in Brussels.
Once the trade negotiations begin, Ireland will be under pressure to ensure that its own trade priorities are met, as other, larger countries move to ensure that their exports to Britain are prioritised. This will be in addition to ensuring that the Common Travel Area preserves the rights of Irish citizens to work and live in Britain. The next few years are likely to be Ireland’s greatest diplomatic challenge since joining the EU.