How will Ireland square the circle of close relations with Brexit Britain and continuing loyalty to the EU?

An Irish government official said to me a few weeks ago: “ we’re with the other guys now.” That arresting comment  meant that Ireland was making a necessary shift further away from Britain and towards the continuing relationship with the EU. A binary choice  is in prospect, goes the argument, depending on the Brexit outcomes. There was a certain amount of whistling bravado in the remark  – perhaps belied  by the Irish government’s intense efforts with its continuing EU partners  to square a Brexit circle, emphasising  the Republic’s great exposure to Brexit  while at the same time demonstrating enduring loyalty to the EU. After all,  Irish analysts fear Brexit will hit Ireland harder than the UK. – or at least they did a couple of months ago when British analysts were fearing the steady downturn in the UK economy – which hasn’t happened so far. So caution is still required.

 The FT’s Big Read feature has devoted an article by correspondent Vincent Boland (£) giving a  rattle to the theme of Ireland’s pivot further towards Europe and away from the UK, but  without reaching any  firm conclusions.

“Garret used to say that joining Europe would represent a psychological liberation for Ireland from its neurotic relations with Britain..,”( says Brendan  Halligan ex gen sec of the Irish Labour party.)   “I think Brexit represents that psychological moment for us. I see it as the end of our colonial relationship, the final cutting of our umbilical cord with Britain.”
When Nicola Sturgeon, Scotland’s first minister, addressed the Irish senate in November, she was given a rapturous reception; senators not only commended her pursuit of Scottish interests in Europe but also declared their support for Scottish independence.

Brexit is changing that political calculation with some Irish politicians starting to imagine the break-up of the UK.
Mr Kenny must navigate the intense debate emerging in Ireland. The debate focuses on whether, and how, to rebalance the country’s diplomatic and political attentions away from London, where it has been focused for the past 20 years, and towards its European friends, notably France and Germany.

There are signs that the Dublin government is already thinking about the wider consequences of Brexit that go beyond its immediate concerns over Northern Ireland and the border.
The historian Mary E Daly calculates that, as recently as 1950, the UK market accounted for more than 90 per cent of Irish exports, which consisted almost entirely of agricultural products. In 2015, the proportion of Irish exports going to the UK was around 15 per cent, reflecting a radical change in the Irish economy.

But this is misleading..  A lot of Irish exports patriate most of the profits to the US multinationals rather than adding directly to Irish prosperity. According to another measure  Belgium is a more lucrative trading partner than Britain but that’s because many EU companies trade through Brussels as the EU capital. The Irish Times gave a more rounded picture. The trade with UK is more in bulk – in good and animals

The UK is Ireland’s largest trading partner, with more than €1.2 billion of goods and services traded between us every week, directly supporting 400,000 jobs on both islands and even more among suppliers and surrounding communities.

Even local businesses are not immune to UK trade as importers and exporters employ local staff who spend locally. We’re so joined at the economic hip that, when the UK economy grows by 1 per cent, we grow by 0.3 per cent as a result. But the reverse is unfortunately true as well.

Businesses want to do more trade, not less; and to create more jobs. All other things being equal, Britain’s exit from the EU would mean higher costs and prices by making it harder to hire the required skills and import raw materials. It would also result in fewer sales on account of tariffs and other barriers. This has to mean less incentive to invest and to create job growth which sustains out communities.

Boland continues in the FT

Many believe that the Irish-British relationship has already reached the moment of psychological liberation that FitzGerald anticipated. Its economy is arguably more exposed to the US than to Britain. Yet the idea that Britain is in decline, and that Brexit could lead to the eventual break-up of the UK, is one of the assumptions behind the new strand of thinking about Anglo-Irish relations.

Northern Ireland is discussed in a separate box

It is hard to overstate the concern in Dublin about the implications of Brexit for the peace process in Northern Ireland, community relations, and border communities. Moreover, Northern Ireland’s ability to make its own case inside the UK is likely to be hindered by its latest brush with political crisis after Sinn Fein walked out of the power-sharing government last week.

Will Enda Kenny follow up Theresa May’s dance of the seven veils on Tuesday with one of his own ?  Will there be a reply to the “ threat” of lower UK  corporation tax  perhaps to rival Ireland’s?  I bet anything he will avoid making a bold binary choice. We await with bated breath.