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Analysis
Divergent approaches on Ireland

Divergent approaches on Ireland

Border clue to why Britain quitting EU

by John Nugée in London

Thu 30 Nov 2017

The UK's negotiations on leaving the European Union with the EU27 have, it seems, hit a major obstacle. The issue concerns the island of Ireland, in particular trade across the border between the Republic of Ireland and Northern Ireland. This will be not just the intra-Ireland border but the EU's external border with the UK.

In view of the apparent narrowing of differences in the last few days between Britain and the EU27 over the financial terms of the UK divorce, the Irish question has become the biggest impediment to the Brexit breakthrough the UK hopes to achieve by mid-December.

Northern Ireland is in a sensitive geopolitical position. It is part of the island of Ireland geographically but part of the UK politically. Under the successful Anglo-Irish accord 20 years ago to bring peace to Northern Ireland, its internal governance is subject to a degree of oversight from a foreign state, the Republic of Ireland. Economically, thanks to this agreement, it is significantly integrated into the Irish economy, indeed in some sectors such as agriculture more so than to Britain.

Difficulties arise because Britain insists that leaving the EU also means departing from the single market and customs union of which the Irish Republic is a member. The outcome could be a 'hard border' between the northern and southern parts of Ireland, with customs posts and border crossing formalities. This would undermine a large part of the peace process.

Some commentators have compared the complexity of the Northern Irish issue to the Schleswig-Holstein question, which strained northern European geopolitics in the middle of the 19th century and continued for nearly 80 years. It was finally resolved, after two wars between Prussia and Denmark, by plebiscites in 1920 as part of the Treaty of Versailles at the end of the first world war.

The current Irish question (to distinguish it from the many previous ones which have accompanied the complicated relationship between Britain and Ireland for at least 900 years) will, I hope, be resolved more quickly, and much more peacefully. But it is an unusual diplomatic conundrum.

All sides genuinely want the same good outcome – as frictionless trade as possible across the intra-Ireland border. And yet it looks unattainable.

Northern Ireland matters hugely to the Republic of Ireland, diplomatically, economically and socially. The Irish insisted, not surprisingly, that resolving intra-Ireland issues were of primary importance. The EU agreed that they should be included in the first round of Brexit negotiations.

The problem is a simple one on the surface, but with several deeper lessons underneath.

The EU has asked Britain to specify how trade will cross the intra-Ireland border. But the UK must give an answer before the nature of that border (and the relationship between the customs and trade regimes on either side of it) has been determined. And the EU has dictated that no work can be done on the nature of future UK-EU trade until the Irish question is solved.

The EU27's rationale for insisting on this was because the other countries needed a way to force the UK to negotiate seriously on the terms of the divorce. The device of 'trade discussions if you do, stalemate if you don't' is very powerful.

Britain has, unfortunately, acquiesced in this sequencing. So both sides are stuck with a dysfunctional process. It is becoming ever clearer in these negotiations that the EU is more concerned with process than with outcome. The EU27 appears to prefer failed negotiations which follow due process to successful negotiations in which rules are bent.

The EU has become an inflexible body, unable to admit it has made a mistake. It is doomed to plough on, heading for failure, rather than reopen issues where consensus, once reached, is too fragile to risk by re-examination.

This preference for rules over outcomes is integral to the EU's psyche – very different from the UK's pragmatic problem-solving style of governance. Historians may eventually determine that it is this difference in approaches that lay at the heart of why the UK was never a successful member of the EU – and why it eventually parted ways.

John Nugée, a former Chief Manager of Reserves at the Bank of England, is a Director of OMFIF. This is an abridged version of an article published by Laburnum Consulting.

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