There is a lot of chatter about Micheál Martin going to the White House to mark St Patrick’s Day and the diplomatic challenge he faces there. Little has been said, on the other hand, about his visit this week to a pretty castle outside Brussels to discuss the future of the European Union with the 26 other leaders. This is not surprising as the outcome was tied up in the euro jargon of medium-term financial frameworks, deepening the single market, the savings and investment union and – you’ll be hearing more of this one – enhanced co-operation.
If the Oval Office is like a blockbuster series on Netflix, the EU meeting was like watching another rainy weather forecast. The EU does not “do” box office.
While the Taoiseach will face goodness knows what in the White House, his bigger challenges could well be in Brussels. EU leaders have been shaken by Donald Trump and the implications of what he is doing to security, trade and transatlantic relations. And many – most, in fact – are struggling with poor economic growth and really difficult budget positions.
As a result, having done not very much for many years on a lot of key agendas, Europe’s leaders are now threatening to do everything at once. Of course there has been a lot of talk – and some action – on defence, but this week’s meeting was focused on the economy and how to make Europe more productive, competitive and ultimately successful.
The EU’s ability to drive this agenda in a meaningful way is in question. There is much talk of cutting “red tape”, which is always a good thing, but may not amount to an awful lot. The real juice is in making the compromises – held up for many years – to allow goods and services to flow more freely across the EU and to let Europe develop into something resembling a single market for savings, investment and financial services. Companies would be able to raise cash from savings pots much more effectively. It’s also in piloting a smart industrial policy that responds to American economic nationalism and the might of Chinese manufacturing in many key sectors.
This creates questions and challenges for all countries, but particularly for a small trading nation like Ireland. The Government needs a strategy and must put itself in the rooms where the key decisions are made. There was a bad start on that score at this week’s gathering, where Ireland was one of eight countries not to be invited to a breakfast meeting of leaders before the formal meeting, organised by Italy with help, reportedly, from Germany and Belgium. Ireland needs to sell itself as having an important input to these discussions due to its record on growth, and not allow itself to be seen as an also-ran. And the wider context is Ireland’s reputation in other EU capitals as a tax haven that looks after itself and in some cases – most obviously defence – offers little to the collective.
It is hard to know whether the pace of progress indicated in the wake of Thursday’s meeting can, in fact, be achieved. A formal EU summit in March will try to make firm decisions. Of course a new phrase was needed and European Commission president Ursula von der Leyen has said there will be a proposed timetable for action on the theme of “One Europe, One Market”. We have been here before. Since early 2024 the EU has been in receipt of two reports from former Italian prime ministers Enrico Letta and Mario Draghi on the single market and competitiveness. Various declarations and monitors followed.
But, in truth, not much has happened. The modern disease of officialdom – analysing, declaring, publishing strategies but not actually doing much – has been in evidence. Now von der Leyen has said that if progress cannot be made, then a smaller number of countries will have to go ahead on their own in key areas, and others can join later if they want.
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Whatever way the ball bounces, it looks like a whack-a-mole of issues for the Coalition. There will be big pressure to move on a plan allowing savings across the EU to be used to fund investment – the so-called Savings and Investment Union. Ireland fears that a single supervisor, probably based in Paris, could undermine its advantages in international financial services. Ireland’s touchiness on trade deals has been illustrated by Mercosur. A decision will have to be made on whether to implement the deal on an interim basis after it was referred to the courts by the European Parliament. A French-led plan to set rules to favour European products and set barriers to ones coming from outside runs against the Irish desire to see free trade. Will US subsidiaries based here be inside the tent or outside? And will Ireland champion moves to really complete the single market? That would mean more competition for Irish businesses in a range of sectors – think telecoms and financial services – but potential gains for consumers.
It is not clear that the Coalition has clear policies in these areas, beyond trying to avoid domestic political damage as each issue emerges. And push could now come to shove in some areas – such as a single EU savings and investment market – if the threat of a small group of countries going ahead on their own, so-called enhanced co-operation, turns into reality as von der Leyen and some leaders of the big member states say it may have to.
Sparingly used in the past, doing so for a big policy would be a departure and would put it up to countries like Ireland. For a State that has sold itself to international investors as being at the heart of Europe, not being in the “inner club” would have obvious costs. Joining, however, might have domestic political consequences, depending on the issue.
Change is in the air. And apart from the big policy questions, this raises a very important practical one for the Coalition. How on earth is an underpowered Civil Service and a Government under pressure on so many fronts supposed to progress its domestic agenda in vital areas like housing, health and so on – while at the same time running what looks likely to be a pressurised and possibly chaotic EU presidency this year? Ministers may get a kick out of chairing high-level meetings, but this won’t butter any parsnips with the voters.