Tuesday, March 29, 2011
This article examines the peculiar history of Ireland’s position within the European Union. It argues that Ireland’s political personality, based on post-colonial dependency, has encouraged national reliance on a low corporate tax rate and American multinational investment as a supposedly acceptable strategy for pursuing a prosperity which eluded Ireland for decades after independence. Ireland took the easy route in that, when it joined the EC, instead of actually making products of interest to European and international markets, it took advantage of its location within the common market to single-mindedly lure multinational corporations through tax savings. Ireland’s approach has lacked the kind of “loyalty to an idea” characteristic of the EU since its founding.
In analyzing the nature of Ireland’s anomalous presence in the EU, the article explores the usual manner in which the EU “transforms” national history, and the corresponding manner in which national history acts on the EU. Ireland has resisted this kind of transformative interaction. While playing the part of an enthusiastic participant in the European project, Ireland was not in fact internalizing EU values of solidarity and cooperation. Rather, Ireland treated its access to the European market, and the extremely low tax environment for US-based multinationals, as a kind of get rich quick scheme. While Irish behavior was inconsistent with the EU ideal of mutual solidarity, it was also damaging towards US society, with its obvious need for increased public investment, which in turn requires adequate revenue from such sources as corporate taxation.
Under this analysis, Ireland also short changed its own culture (including a potential indigenous business culture) and physical environment. Over a long period of time, the EU inexplicably allowed Ireland to use purely tax-based techniques which, if widely imitated by other EU states, would have caused a fiscal crisis for the Union. Despite a severe economic downturn that began in 2009, it appears that Ireland will, if at all possible, maintain a passive and tax-dependent approach to economic development.