Ireland’s Experience with Regional Integration Alan Dukes.

1. Ireland’s Experience with RegionalIntegrationAlan Dukes. Black Sea Conference on Regional Integration and Inclusive Growth February 23-24, 2009.

2. Ireland’s Experience with Regional Integration. Ireland’s experience with regional integration is the history of its involvement with the EU. • Joined EEC in January 1973 • Participated in all economic, monetary and social programmes • One of the 11 founding members of the Eurozone

3. Ireland pre-integration1922 - 1972 • Independence from UK in 1922: Irish Free State becomes Republic only in 1947 • Until 1998, Irish Constitution implied claim to sovereignty over Northern Ireland (part of UK) • “Economic War” with UK in 1930s: Ireland did not “win” • Economic protectionism until 1960s

4. Ireland pre-integration1922 - 1972 • Economically dominated by large neighbour (UK) • Currency union with UK until 1979 • Underdeveloped agricultural sector was mainly a commodity supplier to UK market, prices determined by UK cheap food policy but without access to UK domestic price supports • Indigenous industry sector stagnated behind tariff wall until 1960s

5. Ireland pre-integration1922 - 1972 • Trade relations with UK skewed • From 1957, Ireland was outside EEC tariff and levy wall for food products, tariff wall for industrial products • Political relations with UK unequal • Modernisation and opening of economy began in 1960s, accompanied by measures to attract FDI

6. First steps toward integration • Ireland applied for EEC membership at same time as UK, motivated by - need to gain access to non-UK European markets - difficulty of being outside EEC once UK became a member • Ireland and UK finally joined on Jan. 1, 1973

7. Effects of integrationSignificant European events and policies • Common Agricultural Policy (CAP) • Break with £Stg 1979 • European Social Fund and HR development policy • European Regional Development Fund, 1975 • Direct elections to European Parliament, 1979

8. Effects of integrationSignificant European events and policies • Cohesion Funds, 1986 (economic and social cohesion recognised as Treaty objectives) • Single market programme 1992 • Successive enlargements to 27 Members • GATT Uruguay Round • Successive CAP reforms

9. Effects of integrationSignificant European events and policies • Maastricht Treaty 1992 sets up EMU, opens way to euro • Euro introduced in 1999, currency comes into circulation in 2002 • Energy policy and climate change policy become issues in EU domain • EU takes on external security roles

10. Assessment of Irish experience of regional integration • A small State has significantly reduced its economic dependence on a much larger neighbour • A small State has been put on a politically equal footing with a previously-dominant neighbour • A previously isolated State has become an active part of an influential bloc

11. Assessment of Irish experience of regional integration • There have been major economic, social and political gains • Public capital expenditure efficiency gained from external oversight • Externally-imposed criteria in SGP supported prudent fiscal policy (until early 2000s) • Close collaboration with UK in EU context helped to secure 1998 agreement in NI

12. Deficiencies in EU model of regional integration (unofficial view) • Integrated monetary policy in Eurozone not accompanied by sufficiently integrated fiscal and economic policies • Integration of foreign policy even weaker than that of economic policy Conclusion: EU is a good integration model but remains a significant under-achiever, bothinternally and externally.