Uncomfortable truths for Ireland in an enlarged EU
The cost benefit analysis of EU membership is about to change
The decision by the European Commission to open accession negotiations with Ukraine and Moldova (with Georgia to follow) highlights Brussels commitment to an enlarged EU. And while much of the focus will be on the reforms Kyiv must implement as part of this process, 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 2030 with at least one of the existing candidate countries - Albania, North Macedonia, Serbia and Montenegro.
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 thirty states will change how Brussels works and, even more importantly, how it views its strategic priorities.
For Ireland, this may well be a disaster.
Because an enlarged EU will quickly expose the disjointed and naïve approach to European integration which has prevailed for decades in Dublin. Ireland will soon discover that its blind policy of supporting a bigger, more expansive EU could have negative consequences for Irish citizens, the public finances and, ultimately, the viability of Ireland’s current 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 favor of Qualified Majority Voting (QMV).
Ireland’s future opposition will thus be irrelevant in the face of Paris and Berlin’s desires.
And make no mistake, 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’ current “cash crunch”.
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 (of 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’s accession will also mean the end of the CAP (Common Agricultural Policy) that Irish farmers have known since 1973. The European Council estimates a 20% cut in payments to existing EU members will be required to allow for Ukrainian entry. Kyiv has signalled its expectation of that 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. Just like 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 top.
Taken together, these policy shifts will spell the end of 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 like Ireland) he lapsed into the classic Irish routine of thanking Europe for having us as members for the last fifty years.
Sure, who doesn’t love the Irish?
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.
Speaking in the Irish Parliament 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.