The risible spectacle of another Irish Taoiseach with a sad-looking bowl of shamrock and a perplexed American president is nearly upon us. Portrayed as the annual display of Irish diplomatic genius, this year’s show in Washington is destined to be more tragedy than uplifting drama.
That’s because – as evidenced by the desperate flight of half the Cabinet to various US states on March 17th – Ireland is woefully unprepared for Washington’s new political mantra. This is the “America First” strategy of weaponising dependencies and exerting maximum pressure; dependencies in allies that can be traded and leveraged for other – often unconnected – strategic goals. Just ask Canada, Mexico or battered Ukraine, now fully abandoned as the White House presses pause on military aid.
No other country in the European Union is as hopelessly and naively dependent on the US as Ireland. Such is the level of American influence on the Irish economy that with a stroke of his pen the US president Donald Trump could immediately precipitate a budgetary crisis in Dublin. Without bumper corporate tax receipts from US companies, Ireland would have run a sizeable deficit every year since our last bankruptcy in 2010.
We’ve blown more than half our tax bonanza on either bailing out the HSE or doling out tax cuts that just narrow the income base even further. Most bizarrely Irish of all is the spectacle of our Minister for Finance telling the Eurozone to stick to its spending rules, while the Irish Government keeps breaking them at home. We don’t even have a metro to Dublin Airport to show for a decade of wanton waste.
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On core American goals, Ireland is viewed by the Trump administration as part of the problem, not the solution. On Palestine, we’re diametrically opposed to Washington’s stated aims, a situation exacerbated by Ireland’s preachy humanitarianism.
On security and defence, the American establishment is only beginning to understand the extent to which Ireland has gamed the system for years. The recent call by the chair of the US Senate foreign relations committee, Jim Risch, for Ireland to increase its defence spending is only the beginning of Washington’s awakening to this particular Irish delusion. This call was remarkable in its timing, given the Taoiseach’s simultaneous conversion to dramatically increased military spending.
The situation on technology is just as bad. The politicisation of the tech industry – and social media in particular – by the Trump administration has no upside for Ireland. Substantially dependent on Google, Apple and the rest for employment and corporate tax receipts, Ireland is now squeezed between the rock of American tech and a European hard place.
That is because as the lead regulator for the EU, Dublin is supposed to be enforcing European rules on data protection, disinformation and illegal market practices. And as attitudes harden in Brussels regarding protecting these values, Ireland will be stretched in opposing directions. It is no wonder that Ireland’s European Commissioner, Michael McGrath, whose brief includes elements of digital regulation, has been so conspicuously silent. And therein lies the crux of the problem for Ireland. Because while we are members of the EU, it is American tech and pharma companies that pay the bulk of Ireland’s bills.
Ireland’s exposure is compounded by our inconsistent and performative “Europeanism” in Brussels. We offer nothing credible on security and defence, despite recent announcements by the Irish Government. On Ukraine, we’re masters of humanitarian help, having taken in 112,000 refugees, just not any useful military assistance. On corporate tax and digital regulation we have long been regarded as American stooges.
So what can Ireland do?
The first (and hardest) thing is to admit is that our economic model means we were effectively bought and paid for by Washington years ago. We have no discernible strategy for economic diversification. No plan exists for hedging our tax risk. President Trump even personally owns a slice of the Clare coastline. Our economic model is that of the 51st state of the United States of America. And while the naive and the shameless might offer up Ireland as a bridge between Brussels and Washington, such a vision is simply ridiculous. Taking on this role would require credibility that Ireland simply doesn’t have at the moment – either in Boston or in Berlin.
Rather, the time has finally come for Dublin to decide where its economic future really lies. And it’s here – miraculously – that the luck of the Irish might just apply. Because – out of sheer panic – the EU is about to embark on a do-or-die process to regain its economic vigour. And on this, Ireland can offer something approaching a positive agenda, in the form of a vision for a less bureaucratic, streamlined, single market wealth-creating machine. This would be a single market 2.0 in which the free movement of capital is actively and consistently promoted. As one of the most open economies in the EU, Ireland can take a leading role in finally delivering a meaningful capital and investment union for the EU – a strategy in which removing barriers to economic growth, an increase in the ability of companies to trade across European borders and the reduction of administrative burdens are the only priorities. It’s the old British mantra of a single market-led EU, recycled for the Trumpian age.
This strategy would suit Ireland’s skill set and mesh with the current mood in Brussels. With one foot in the single market and the other wedged in Silicon Valley, we should promote an-Americanesque deregulation agenda draped in a European flag.
We will still be viewed as defence freeloaders by many in Brussels. And Washington can literally turn off our lights with some changes to its corporate tax code. But a vision for the EU based on a rejuvenated single market is one that can also be sold to Brussels and our US multinational masters. After all, what tech and pharma billionaire doesn’t love a bigger profit?
Dr Eoin Drea is senior researcher at the Wilfried Martens Centre for European Studies in Brussels, the think tank of the European People’s Party
