Speech by Mr. Bertie Ahern to the Northern Ireland Economic Conference, Derry – October 19th 2016.
The key principles under-pinning the Brexit negotiations
Of course I am disappointed by the decision of the British people to leave the European Union. But we all must respect this democratic decision and approach the impending negotiations on British withdrawal of the European Union in a resolute and determined manner.
This means that these discussions must take place within a context of mutual respect and understanding.
But equally, both sides must respect that the European Union is a political body that has legal powers enshrined within its governing operations. The EU is built on a legal framework of different regulations and directives and a variety of EU treaties have vested the EU institutions with a number of direct powers and competences.
These treaty based legal provisions mean that countries that are either members of the EU or that seek to negotiate access to the single market of the EU have legal obligations that must be complied with covering a range of different policy areas.
But let me tease through the likely chronological order of the events that are now going to take place concerning the timeframe for the withdrawal of Britain as a member of the European Union. I would then like to talk about the effects that this process may have on Northern Ireland and for the future relationship between the Republic of Ireland and Northern Ireland as well as for the future relationship between the Republic of Ireland and Britain. I would then like to talk about the future of the European Union itself.
The timeframe for Brexit negotiations
It is now very clear that the British government is not going to send the article 50 letter to the European Union until next year informing the other 27 members of the EU that it is seeking to commence the two year timeframe to negotiate withdrawal from the European Union.
European Union governments should and must respect that the British government does need time over the coming months to formulate it’s strategy and it’s position regarding a number of complex political issues before triggering this article 50 letter.
The timeframe for these EU withdrawal negotiations is legally set out within the provisions of the Lisbon Treaty and the negotiating period of two years can only be extended with the unanimous agreement of all the member states of the European Union.
So taking into account the reality that the negotiating timeframe is quite a narrow one, both the British government and indeed the European Union do need some time to put in place the preparations concerning how these UK withdrawal negotiations are going to be constructed.
The result of the Brexit referendum is being watched very closely, not only within the European Union but around the world. Business communities in Ireland, in Britain, in Europe and across the world want to be given more certainty with regard to the direction of these forthcoming negotiations.
Various surveys that have been carried out since the Brexit referendum last June have highlighted that it is the uncertainty surrounding these negotiations that is a key concern to interested parties, most notably from the business community. So it is incumbent on the British government to set out a more detailed roadmap in the coming months with regard to the key issues that need to be addressed as part of the process of British withdrawal from the European Union.
The benefits of the EU Single Market
Countries, such as Norway and Switzerland do indeed have access to the single market in Europe that covers a population of over 500 million people.
The benefits of access to the single market are many. Businesses can operate freely within the single market free in the knowledge that no customs duties or tariffs will be applied at any EU internal borders.
It makes it easier for businesses to engage with suppliers, organise their finances and trade their products and services. This ensures that companies, both small and large can maximize their efficiencies and become more competitive with subsequent strong economic returns. There is a reduction in business costs in accessing the single market. Companies can plan how to develop their companies within the single marketplace with a strong degree of certainty.
Consumers have more choice too. The policies to promote the single market have ensured that consumers, for example, pay lower prices for airline tickets and for their mobile phone bills.
But there is a strong foundation that underpins the structure of the single market. The protection of the four freedoms – the free movement of goods, persons, capital and services are intrinsic elements of the single market. This new single market environment has ensured that people can choose freely where they want to live and work. Academic and professional qualifications are mutually recognised across the length and breadth of the EU. The success of the single market is premised on the need for governments to fully comply with EU laws that both respect and enhance the free movement of goods, persons, services and capital and to ensure that anti-competitive practices are prohibited.
Norway, Iceland and Liechtenstein are members of the European Economic Area (EEA) and accordingly they have to rigidly implement new EU laws that underpin the operation of the Single Market. (And this requirement to enact new EU directives and regulations within these three countries applies irrespective of the fact that these countries do not have a seat at the table that decides the nature and content of new EU Single Market laws.)
Switzerland, on the other hand, is not a member of the European Economic Area. The Swiss people rejected joining the European Economic Area in a referendum in 1992. The Swiss- EU relationship with the European Union is governed by a series of bilateral sectoral agreements. The European Union signed a free trade agreement with Switzerland in 1972 and it has since put in place a series of bilateral agreements covering key matters such as the agriculture sector, public procurement, combating fraud, the taxation on savings and participation by Switzerland in EU research and science programmes. These bilateral agreements ensure that 1 billion euro worth of goods can cross Swiss borders from and into Europe every day.
EU financial support has played and continues to play an important role in developing the economy of Northern Ireland.
Many government agencies, public bodies, private sectors companies and the farming community continue to receive EU funding. Key EU instruments that support the economy of Northern Ireland include the Common Agricultural Fund, the European Regional Development Fund, the European Social Fund, the European Maritime and Fisheries Fund and the European Territorial Cross Border Co-operation Programme.
We should recall for a moment that the EU budgetary process works in a multi-annual manner. The present financial perspective that supports EU programmes in Northern Ireland (and indeed across other member states of the EU) runs between the years 2014 – 2020.
Under the Common Agricultural Policy 2014 – 2020, farmers in Northern Ireland will receive in excess of 2.6 billion euro (2.3 billion sterling pounds) in direct payments.
This accounts for 87% of total farm income in Northern Ireland. A further 227 million euro is being allocated as well under the EU rural development programme 2014 – 2020. These monies are being used to make the agriculture sector more competitive, support environmental best practices, develop more entrepreneurship and create jobs.
Between the period 2007 – 2013, 9% of GDP in Northern Ireland was due to EU financial transfers. Two thirds of this figure was EU support for the agriculture sector. The agriculture and food sectors are vitally important components of the economy of Northern Ireland and these sectors will need to be heavily supported in financial terms post the British departure from the European Union. The agri-food sector accounts for one quarter of all manufactured goods in Northern Ireland alone and it is creating many high-quality jobs. By continuing to support the creation of new innovations, the agri-food sector in Northern Ireland can and will develop new products and services. It will remain as a vital cog in the wheel of the economy in Northern Ireland and contribute to combating the global challenge of food security.
Equally, the European Regional Development Fund is modernizing energy networks, strengthening the capacity of small and medium sized companies to grow domestically and internationally and to build new infrastructure to further enhance competitiveness across the economy of Northern Ireland.
The European Social Fund is supporting programmes to provide new education and training skills for people who are unemployed as well as for re-training and improving the skills of people already in the workplace. Skills development for key sectors including for industries connected to new information communications technologies (ICT) is a key element of this programme. To help build a stronger economy, improving ICT literacy levels and understanding are now as important as having basic literacy and numeracy skills. In 2015, the economy of Northern Ireland benefitted in transfers from a variety of EU structural fund programmes to the level of 168 million euro alone.
The Interreg cross border programme that runs between 2014 – 2020 is investing heavily in the research, innovation, environment, sustainable transport and health sectors. The budget for this Interreg initiative is 283 million euro, 85% of which is provided via the European Regional Development Fund with the remainder of funding being allocated by both the British and Irish governments.
It is very important too that researchers, universities, innovators and private and public bodies continue to secure financial support for participating within EU research, innovation and science initiatives. Under the EU 7th research and technological framework programme 2007 – 2013 privates companies and public organisations in Northern Ireland secured 86 million euro in financial support to participate on important collaborative research and innovation programmes in the fields of ICT, health, agriculture and energy. Since 2014, a further 36 million euro has been drawn down in Northern Ireland under the EU Horizon 2020 science, research and innovation initiative.
Supporting research and innovation is helping to build a knowledge economy in Northern Ireland and it is supporting the creation of high quality jobs. It is equally helping to contribute to devising new solutions to help tackle societal challenges such as combating chronic health diseases, developing sustainable food production and bringing cleaner, renewable and more energy efficient products into the marketplace.
Equally there has been strong participation by students from universities in Northern Ireland on the EU Erasmus mobility education initiative. This affords opportunities to students to carry out part of their studies abroad in other EU member states. Teachers have also taken part in training courses under EU Comenius initiative too while vocational education and training courses have being supported by the EU Leonardo De Vinci programme. These EU schemes by their nature are very international in their focus and I believe that it is very important that access to these initiatives is provided to students and teachers alike from Northern Ireland moving forward.
EU support for the Peace Process
The European Union has allocated 150 million euro towards the cross border Peace 4 programme that runs for the financial period 2014 – 2020.
The overall budget for Peace 4 is 270 million euro when one includes the contributions that are made by both the British and Irish governments.
This Peace 4 initiative supports and promotes many important economic and social projects including the following:-
- The promotion of urban and rural regeneration.
- Developing cross – border co-operation.
- Financing social inclusion measures.
- Devising new ways for local communities to work together in a spirit of partnership.
- Financially backing a series of bottom up initiatives that deliver upon the key objectives of the Peace programme.
- The convening of important workshops on conflict resolution and the organisation of key events that support victims and survivors of the conflict.
The European Union has always been to the forefront in supporting the peace process on the island of Ireland. The EU was a very early supporter of the International Funds for Ireland (IFI) programme when it was set up in 1986. And the European Union has always financially backed different EU peace programmes that have been put in place in Ireland since the mid 1990s.
In fact, here in Derry, the Peace Bridge secured over 11 million euro in funding from the European Union. This foot and cycle bridge is a symbol of reconciliation as it brings both sides of the river Foyle together.
The European Union is in itself a peace process and the European Economic Community was founded in 1957 with the clear objective of helping to build peace and reconciliation within Europe. I would strongly urge the European Union to continue to support future peace programmes in Ireland, post the British departure from the European Union.
The European Union has a very strong record in supporting social and economic programmes in countries neighbouring the European Union.
It is incumbent on all interested parties and stakeholders alike to ensure that British withdrawal from the European Union does not diminish or undermine the peace process on the island of Ireland. In fact, there is no reason why the European Union cannot continue to support the peace process in Ireland within the changing new political architecture of the European Union.
The peace process is being supported in a very concrete sense by countries around the world such as by the United States of America, Canada, Australia and New Zealand.
The European Union has never been found wanting when it was asked in the past to support the peace process on the island of Ireland and I do believe that many of the member states of the European Union would want to continue to support in a tangible sense the peace process into the future.
Common Travel and Trade Areas
We must all consolidate upon the gains of the peace process in the years ahead. Central to any final agreement that the British government reaches with the European Union must enshrine two key elements that are of a critical importance to people living on the island of Ireland.
Firstly, people must be able to move freely between Britain and Ireland without restriction and in an unencumbered manner. Such a system of having free movement of people between our respective countries pre-dates British and Irish membership of the European Economic Community in 1973. 30,000 people cross the border every day now between the Republic of Ireland and Northern Ireland.
Ensuring that people can thus travel and move easily does support the concept of having an open border in practice. An open border supports cross community co-operation, the future development of the tourism sector and it can and will create more business opportunity.
Secondly, we must ensure that a common trading area between Ireland and Britain remains in place.
1 billion euro worth of trade is carried out between Britain and Ireland every week.
Britain is Ireland’s largest trading partner in the world. Britain is Ireland’s number one food export destination, accounting for nearly 40% of all Irish food and drink exports that include prepared consumer goods, beef, poultry, sheep meat, seafood, horticulture and cereal products. Trade in services between our two countries is now increasing too in the fields of clean technology, electronics and the engineering sectors.
Annual trade from the Republic of Ireland to Northern Ireland exceeds annually 1.5 billion euro and leading traded products include food, beverages, animal oils and manufactured goods. So if any restrictions were to be put in place relating to the trade in goods and services between Ireland and Britain, this would have a negative economic outcome. So it is incumbent on all interested parties from the political, business, trade union, farming and civic society organisations to continue to highlight the twin importance from a political and economic viewpoint of maintaining both the common travel and trading arrangements between Ireland and Britain into the future.
The Future of the European Union itself
I believe that there are a number of very positive initiatives and programmes that have been developed by the European Union.
The EU institutions are playing an important role in continuing to support the development of the European single market and this is playing a key role in making the European Union economy more competitive. The single market was given the political go-ahead with the enactment of the Single European Act in 1987.
By 1992, the internal market of Europe was then launched. It has ensured that a system comprising the free movement of goods, services, capital and people could be put in place across 28 countries incorporating a population of over 500 million people. Breaking down the barriers to trade and making it easier to do business in Europe has reaped strong economic returns.
The Euro currency that operates in 19 countries has helped to eliminate currency exchange risk and it has strengthened the work of the single market. The Euro currency has brought more stability for consumers, more opportunities for businesses and it is helping to integrate financial markets. And the EU institutions rightly are continuing to update the rules that govern economic and monetary union so as to make the euro zone more competitive.
The European Union has been to the forefront in promoting strong social practices in the workplace and in eliminating discrimination in society based on gender, race or one’s sexual orientation.
The European Union has introduced initiatives to ensure that one can secure medical cover while travelling or working in another EU member state. And the EU has been to the forefront in promoting student educational exchanges.
In an international context, the European Union is the largest contributor of development aid in the world and it is playing a leading role in tacking global poverty and diseases such as HIV/Aids, malaria and tuberculosis. The European Union is ensuring that the international community is implementing global commitments in the field of climate change. There will still be 27 member states as full members of the European Union post British withdrawal from the EU, with a number of other countries seeking full membership to this political and trading block.
However, the referendum result in Britain must bring a serious cause for reflection by the European Union. It cannot be a case of business as usual for the European Union.
We are now living within a different European political environment.
There is a dis-connect – a communications gap – between the EU institutions and many people in Europe who evidently do not believe that Europe is promoting policies that will protect and enhance their interests. It is incumbent on the European Commission, the European Parliament and the EU governments to sit down with interested parties from the business, trade union, farming, consumer and civic society groups to see what measures can be put in place to bridge and redress this democratic and information deficit. This cannot be an idle discussion. Britain is the second largest economy within the European Union and the departure of Britain as a member of the European Union is both a confidence and a psychological blow to those of us who are passionate about supporting the EU as a positive political and economic force.
A great human trait is the understanding of one’s strengths and one weaknesses.
The European Union must recognise that this democratic and commutations deficit exists between the people of Europe and the EU institutions. The EU must do more to explain to people how the work of the EU is directly benefitting their lives and their communities in social and economic terms. Talking about the work of Europe alone in broad macro-economic terms is certainly not the answer.
I also believe that the European Union must re-visit it’s founding principles so as to both convince and re-assure people that the EU is a force for good.
We must re-emphasise that the European Economic Community was founded in 1957 so as to help bring peace to a continent that had witnessed three wars on it’s territories between 1870 and 1945. The European Union has brought peace and stability to the continent of Europe and indeed to many other parts of the world. This is a story that needs to be told again and again.
We all recognise that the forthcoming Brexit negotiations will be difficult and challenging. In a European context, I had the privilege of attending meetings of EU heads of state and government for eleven years. I was President of the European Council in 2004 when ten new countries acceded to the European Union. I was involved between the years 1997 and 2008 in overseeing either the ratification or the negotiation of a number of European international agreements, including the Amsterdam, Nice and Lisbon Treaties. I was a signatory to the Maastricht treaty in 1992 that paved the way for the introduction of the single European currency. Securing agreement for the terms of all these treaties involved hard, tough and pain staking negotiations.
Yes – the European Union has never faced in it’s history as complex an exercise as the forthcoming negotiation of the exit of Britain from the European Union. But with the political goodwill to succeed and with a mutual respect for one another, agreement can and must be reached between the EU and Britain on the terms of British withdrawal from the EU. It is certainly for the mutual benefit of both Britain and Europe that this is the case and the interests of all the people on the island of Ireland must be protected during this negotiating process.
Thank You for today’s lunch event.