50 years in the EU: Brian Cowen writes how Ireland's EU membership has 'transformed the nation'

Retired Taoiseach Brian Cowen takes a comprehensive look at how EU membership has truly transformed Ireland on a whole range of fronts over the past half century

WHEN Ireland's application for membership of the EEC was accepted at the beginning of 1973, the then Taoiseach Jack Lynch expressed his ambitions and hopes for the country as a member of the community.

In a Dáil debate on our EEC accession at the time, the Taoiseach said that membership of the EEC would bring "enormous benefits" to Ireland. He highlighted the economic advantages of membership, including access to the Common Market, increased trade, and greater foreign investment.

Mr. Lynch also emphasized the political benefits of membership, stating that it would help Ireland to "play a full and active role in the councils of Europe" and to be a part of the decision-making process on issues affecting the continent.

Furthermore, the Taoiseach spoke about the cultural and social benefits of membership, noting that it would provide opportunities for Irish people to travel, study, and work in other European countries, and to share in the rich cultural heritage of Europe.

In summary, he believed that membership of the EEC would bring significant economic, political, social, and cultural benefits to Ireland, and that it would enable the country to play a full and active role in the affairs of Europe.

So it has proved to be.

Over the years, there have been several major changes to the EEC/EU budget, including the introduction of new funding mechanisms and the expansion of the budget to cover a wider range of policies.

One significant change came in the 1980’s with the introduction of the "own resources ceiling," which limited the amount of revenue that the EEC/EU could raise through its own resources. This led to the adoption of new funding mechanisms, such as the Value Added Tax (VAT) contribution, which required member states to transfer a portion of their VAT revenue to the EEC/EU budget.

Another major change came in the 1990’s with the adoption of the "Agenda 2000" package, which included reforms to the CAP and increased funding for regional development and social policy. This package also paved the way for the enlargement of the EEC/EU to include new member states from Central and Eastern Europe.

In more recent years, the EEC/EU budget has continued to evolve, with a greater emphasis on policies related to research and innovation, climate change, and migration. The budget is now structured around several key policy areas, including the CAP, cohesion policy, research and innovation, and external action.

Overall, the EEC/EU budget has become more complex and diversified over time, reflecting the changing priorities of the member states and the evolving needs of European society.

Ireland has benefited from the adoption of the EEC/EU budgets in several ways since it joined the Community in 1973.

One of the main benefits has been access to EU funds, which have supported Ireland's economic and social development. For example, the Structural Funds and the Cohesion Fund have provided funding for infrastructure projects, such as roads, railways, and water supply systems, as well as for education, training, and job creation initiatives. These funds have helped to reduce regional disparities within Ireland and have supported the growth of key industries such as agriculture, tourism, and technology.

The CAP has also been an important source of support for Irish agriculture, providing farmers with guaranteed prices and income support. It has helped to transform Irish agriculture from a small-scale, subsistence sector to a modern, export-oriented industry that is a significant contributor to the Irish economy.

In addition, Ireland has benefited from EU research and innovation programs, which have supported the development of new technologies and products and have helped Irish businesses to compete in global markets.

EU membership has also facilitated trade and investment between Ireland and other EU countries, as well as with countries outside the EU. This has created new opportunities for Irish businesses and has helped to attract foreign direct investment to Ireland, which has been a major driver of economic growth in recent decades.

Membership of the EU has provided Ireland with a platform to participate in the development of European policies and to have a say in decisions that affect its interests. This has enabled Ireland to play a more prominent role on the global stage and to work with other EU countries to address common challenges such as climate change, migration, and international security.

Since Ireland's accession to the European Economic Community, the country has undergone significant economic transformations that have had a profound impact on employment growth and the sectors of industry responsible for job creation. Some of the key developments are:

Manufacturing and Export-Oriented Industries: In the 1980’s and 1990’s, Ireland attracted foreign direct investment (FDI) from multinational companies, particularly in the technology and pharmaceutical sectors. These companies were attracted by Ireland's low corporate tax rates, skilled workforce, and access to the EU market. As a result, manufacturing and export-oriented industries grew rapidly, and became a key driver of employment growth. Today, these industries still account for a significant proportion of Ireland's GDP and employment.

Services Sector: The services sector has also grown significantly since Ireland's accession to the EEC. This has been driven by growth in areas such as finance, business services, and tourism. In particular, Ireland has become a major hub for financial services, with many multinational banks and insurance companies choosing to establish European headquarters in Dublin.
Construction and Property Development: In the early 2000’s, Ireland experienced a construction boom driven by a combination of low interest rates, easy credit, and strong economic growth. This led to a surge in employment in the construction and property development sectors. However, this boom was followed by a sharp downturn in the late 2000’s, which resulted in a significant contraction in employment in these sectors.

Agriculture and Food Processing: Agriculture has long been an important sector of the Irish economy, and we are known for its high-quality food products. In recent years, there has been a renewed focus on promoting Irish food and drink products in international markets, which has led to growth in the food processing and agribusiness sectors.
Knowledge-Intensive Industries: In recent years, there has been a shift towards knowledge-intensive industries, such as ICT, life sciences, and renewable energy. This has been driven by a recognition of the need to diversify the economy and move towards higher-value-added activities. These industries are expected to be a major source of employment growth in the future.
Ireland's economic development since joining the EEC has been characterized by a shift towards higher-value-added industries, particularly in the manufacturing, services, and knowledge-intensive sectors. While there have been challenges along the way, such as the financial crisis of the late 2000’s, Ireland's economy has shown resilience and continues to be a significant contributor to the EU economy.

An example of the European Union and its institutions showing particular solidarity to Ireland was when they played an important role in assisting Ireland during the world banking crisis from 2007 onwards and in supporting its subsequent recovery.

In 2008, Ireland was hit hard by the global financial crisis, which led to the collapse of its banking sector and a sharp contraction in its economy. The Irish government was forced to seek a bailout from the EU and the International Monetary Fund (IMF) in 2010, which came with a set of conditions known as the "Troika" program.

The EU institutions, particularly the European Central Bank (ECB), played a crucial role in supporting Ireland's banking system during this period. The ECB provided emergency liquidity assistance to Irish banks to prevent them from collapsing, and also played a key role in negotiating the bailout package with the Irish government.

The EU also worked with the Irish government to implement a range of policy reforms aimed at restoring economic growth and stability. These reforms included measures to address Ireland's high public debt and budget deficit, as well as reforms to the banking sector and the labour market.

Over time, these efforts paid off and Ireland began to recover from the crisis. The Irish economy returned to growth in 2011 and has since become one of the fastest-growing economies in Europe. Ireland's unemployment rate has also fallen significantly in recent years, from a peak of 15% in 2012 to around 5% in 2021.

In summary, the EU and its institutions, together with the International Monetary Fund (IMF) played a key role in supporting Ireland during the world banking crisis and in facilitating its subsequent recovery. Through a combination of financial support, policy reforms, and institutional assistance, the EU helped to stabilize Ireland's economy and lay the groundwork for its future growth and prosperity.