The decision of the recent European Council Summit in Brussels to formally open accession negotiations with Ukraine and Moldova highlights the commitment of Brussels to an enlarged EU. And while much of the focus will be on the reforms Kyiv must implement as part of this process or Hungary’s opposition to additional financial aid to Ukraine, it’s now clear that that the EU will – over the next decade – welcome a significant number of new members.
In addition to Ukraine and Moldova, membership talks will likely conclude by 2040 with at least one of the existing candidate countries from the Western Balkans – Albania, North Macedonia, Serbia and Montenegro. Despite the ongoing war, the EU’s accession procedures remain stubbornly laborious.
This will be an a la carte enlargement designed to import the vast economic potential of Ukraine into the Single Market, strengthen the EU’s influence in the Western Balkans while also staunching Russian influence in eastern Europe. These new members will start to enjoy the benefits of membership incrementally as the EU seeks to embed them in democratic, rules-based systems.
But make no mistake – this will be a more eastern, more Balkan EU. And a union of more than 30 states will change how Brussels works and, even more importantly, how it views its strategic priorities.
Ireland has been consistent, and unequivocal, in its support for Ukrainian accession and in providing humanitarian assistance to Ukrainian refugees. However, such support is about to be tested as the implications of what a bigger, poorer EU means for Ireland begin to come into focus. And for parts of the Irish economy, enlargement may well spell disaster.
Because a bigger EU will quickly expose the disjointed and naive approach to European integration which has prevailed for decades in Dublin. Ireland will soon discover that its blind policy of supporting a more expansive EU could have negative consequences for Irish citizens, the public finances and, ultimately, the viability of Ireland’s economic model.
Put simply, Dublin will have to stump up an awful lot more cash to receive considerably less payback in an expanded EU. It’s hardly a vista that inspires confidence in any future referendum campaign on EU reform.
Consider two of Ireland’s perennial priorities in Brussels – corporate tax and agriculture.
To make enlargement work, the EU will have to undergo a structural transformation to simplify decision making. Franco-German proposals already exist on removing national vetoes at European Council level for almost all issues (including taxation) in favour of Qualified Majority Voting (QMV).
Ireland’s future opposition to tax reform will thus be irrelevant in the face of Paris’s and Berlin’s desires. It is tomorrow’s world regardless of who Fianna Fáil ships off to Brussels as the next Irish Commissioner.
The EU will seek to further harmonise (and raise) its share of corporate tax income. The European Commission is already committed to sourcing additional revenue from member states to pay for the EU’s future commitments on enlargement, the Green Deal and digitalisation – a situation made even more urgent due to Brussels’s current “cash crunch” owing to its dramatic Covid and Ukraine-related expenditures.
Remarkably – and despite the EU issuing hundreds of billions of joint debt as part of its post-Covid Recovery Fund – no agreement has been reached on how to repay these borrowings (for which Ireland is partly liable). Add in the EU’s ongoing financial support to Ukraine (€18 billion, with another €50 billion proposed up to 2028) and increasingly ambitious environmental targets which require at least €1 trillion in investment over the next decade, the EU is spending like never before.
And that’s before we even start talking about the actual costs of enlargement. Ukraine and Moldova are approximately three times poorer than the EU’s current most disadvantaged member (Bulgaria).
Ukraine’s accession will also mean the end of the Common Agricultural Policy (CAP) that Irish farmers have known since 1973. The European Council estimates a 20 per cent cut in payments to existing EU members will be required to allow for Ukrainian entry. Kyiv has signalled its expectation of that the CAP will be “rewritten” once it becomes an EU member. Compared to Ukraine’s importance as a food exporter, the views of Irish farmers will be lost on the wind. And so, too, could thousands of family farms.
Ireland’s declining transfers from Brussels will thus be matched by significantly increased contributions to an expanding EU budget. The loss of our national veto on corporate tax policy will just be the cherry on a rapidly shrinking cake. It doesn’t help that Ireland’s financial contributions to Brussels are based on our exaggerated Gross Domestic Product (GDP) data. Taken together, these policy shifts have serious implications for Ireland’s current economic model.
In a speech to the European Parliament in June 2022 the then taoiseach Micheál Martin reiterated Ireland’s support for an enlarged EU with a budget to match. But, rather than set out a vision of how these strategic goals should be implemented incrementally and carefully (especially for net EU budget contributors such as Ireland), he lapsed into the classic Irish routine of thanking Europe for having us as members for the last 50 years.
Sure, who doesn’t love the Irish? And wasn’t Brussels great for standing by us on Brexit?
Alas, this is a backward-looking strategy which belies a political unwillingness to lead an informed debate on Ireland’s future role in the EU. It also ensures a rude awakening for the Irish public in the years ahead – one which could empower both extremes of the political spectrum.
Speaking in the Dáil in 1970, the late Sir Anthony Esmonde argued that Ireland should negotiate with Brussels “as a sovereign state even though we may be giving away a small degree of some of our sovereignty, but at least let us fight our own battle on Irish principles and Irish economics”.
It’s advice Ireland continues to purposefully ignore, both in Dublin and in Brussels.
Eoin Drea is a senior researcher at the Wilfried Martens Centre, the official think tank of the European People’s Party of which Fine Gael is a member