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Do the Irish Owe Europe?

Proponents of European integration are worried today that Irish voters will reject the Lisbon Treaty, which is essentially a repackaging of the EU Constitution that was defeated in 2005. They are so worried that they are making rather strange arguments for why the Irish should vote for the treaty. The New York Times quotes French foreign minister Bernard Kouchner saying:

It would be very, very troubling that we would not be able to count on the Irish who counted a lot on Europe’s money.

Times reporter Sarah Lyall goes on to explain:  

Ireland is one of Europe’s great success stories. European largess has helped fuel the country’s extraordinarily rapid transformation from a poor, homogeneous, largely agrarian society to a place of flourishing international business.

It doesn’t speak well of the treaty that its proponents must resort to saying “you owe us” in trying to convince Irish voters. If giving the EU more power were prospectively good for Ireland, then support for the treaty shouldn’t have to be seen as a quid pro quo for past assistance. But what of this claim that EU largess was the secret to Ireland’s economic success? As the Goldwater Institute’s Benjamin Powell has written, the economic growth that led to Ireland becoming the “Celtic Tiger” started in the late 1980s when Ireland dramatically reduced the size of its government. Non-interest government spending was cut from 55 percent of gross domestic product in 1985 to about 41 percent in 1990. The top tax rate fell from 65 percent in 1985 to 44 percent in 2001, while the standard income tax rate was cut from 35 percent in 1989 to 22 percent in 2001. In the 1980s, Ireland’s per capita income was only 63 percent that of Great Britain, but by the end of the 1990s, Ireland had shot past both Britain and Germany in per capita income.

The Irish have had success with less government. The Lisbon Treaty further centralizes power in a club that sees low taxes as contrary to European solidarity. Irish voters are doing the math now.

Posted on 06/12/08 12:57 PM by Alex Adrianson

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