Address to the Brookings Institution: Ireland’s Circles of Connection– the European Union, the United Kingdom and the United States

17th October, 2019

Ladies and Gentlemen,

It is a pleasure to be back in Washington, and to be here again at the Brookings Institute.

The last time I spoke here, I commented that we were at a key stage in the Brexit process.

I think today we can truly say that we have reached a key moment, following the agreement that has been reached this morning in Brussels on a revised Withdrawal Agreement and Political Declaration on the future relationship between the EU and the UK.

This agreement has been reached following intensive negotiations between the EU and the United Kingdom. Negotiations which followed the meeting last week between the Taoiseach and the British Prime Minister.

This is a hugely welcome development, which I hope sets us on the path to an orderly UK withdrawal from the EU.

As we meet here today, in Brussels the European Council is meeting to consider this new agreement.

So, an important moment indeed. I am doubly glad to be here with you today, to talk about how Ireland is responding to the challenges which Brexit will bring.

Circles of Connection

In a speech shortly after WWII, Winston Churchill spoke of Three Majestic Circles – or spheres of influence – that defined Britain’s foreign policy.

When I consider my own country’s place in the world, I think instead of circles of connection.

And three in particular – with Europe, the UK and the US – which have helped shape modern Ireland.

These circles connect us with the main markets for our exports.

With three of the major world currencies – euro, dollar, and sterling.

And with three centres of liberal democracy.

In recent decades, these overlapping and reinforcing circles have been the basis for huge progress for Ireland.

Our economic prosperity and well-being.

Our place in the world.

Peace on our island.

By transforming the context in which we addressed our age old National Question – that of understanding and defining our relationship with Northern Ireland and the UK.

In the words of Nobel Prize winner John Hume, ‘The European Union is the best example in history of the world of conflict resolution’.

For Ireland, therefore, Britain’s decision to leave the European Union poses particular challenges, which go to the heart of relations on our island, between the two islands, and how this affects our engagement as a member of the EU and our place in a fast-changing world.

Key Stage in the Brexit Process

That is why it is so important that progress has been achieved today in reaching agreement between the EU and UK negotiating teams on a revised Withdrawal Agreement and Political Declaration.

Both sets of negotiators have worked long and hard to achieve this outcome, with compromises on all sides. Ireland has worked closely with the EU negotiating team as well as with the UK throughout this process.

The package is now subject to endorsement by the European Council, – which, as I said, is meeting today and tomorrow in Brussels.

It will also need to be ratified by the European Parliament and the British Parliament, so there is still some way to go until we have absolute certainty that there will be an orderly UK withdrawal.

But the Irish Government is firmly of the view that this opportunity should be grasped and a deal concluded that will ensure an orderly withdrawal.

Ireland’s objectives for this stage of the Brexit process have been clear and consistent from the very beginning.

Recognising the unique situation on the island of Ireland, the revised draft Protocol on Ireland and Northern Ireland provides important safeguards that the Good Friday Agreement will be protected in all its parts, including avoiding a hard border, protecting North-South cooperation and the all island economy.

It also protects the integrity of the EU’s Single Market and Customs Union and Ireland’s place in them.

The agreement provides a legally operable solution, providing certainty that, at the end of the transition period, the benefits of the peace process and the all island economy can continue to be enjoyed.

I believe these arrangements will work well for the people and economy of Northern Ireland.

The revised deal will ensure enhanced democratic support for the specific arrangements for Northern Ireland, and enables all the people of Northern Ireland, through their democratic Institutions established under the Good Friday Agreement, to decide the long-term direction of Northern Ireland’s economy.

Any agreement will work better if there is a meaningful role for the Institutions in Northern Ireland on matters that affect them.

Importantly, the revised draft Protocol continues to make crystal clear that nothing in this Agreement will prejudice the constitutional status of Northern Ireland and the principle of consent, as set out in the Good Friday Agreement.

The finalised Agreement secures a transition period, which is hugely important in giving certainty to citizens and businesses. 

And there is also agreement on the rights of EU and UK citizens, as well as on the financial settlement.

All of this is very welcome indeed.

Ratification of this Withdrawal Agreement, and endorsement of the Political Declaration, will provide much needed certainty. 

Looking forward, it also provides a good basis for constructive negotiations on the future relationship between the EU and the UK.

Much now depends on political developments in London.

I hope the House of Commons will give this Agreement serious consideration and that there is a positive vote. 

In the meantime, we continue work to prepare for the UK’s exit. 

Even with the best possible agreement, it is still the case that the UK is leaving the EU, and this will bring change. 

It is important that Ireland is ready for that change, for our citizens and our businesses.

We are continuing our preparations for all scenarios, and I will say a few words about what we are doing.

But I want to be clear that one thing will not change. The UK will remain our nearest neighbour, a key economic partner, and co-guarantor of the Good Friday Agreement.

With so many ties between us, I look forward to deepening this vital relationship.

Preparing Ireland for Brexit

Ladies and gentlemen,

The Irish Government has always been clear that Brexit will pose a significant challenge for Ireland’s economy in whatever form it takes.

But we face this prospect from a position of strength.

After a long and difficult journey, balance was restored to the public finances last year.

Despite many challenges in the global economy, our economic growth is broadly based, and our economy is more resilient than in the past.

The Irish economy on a GNP basis grew by 6.5% in 2018, and is projected to grow by 4.3% this year.

Of course, a No Deal Brexit – which we now hope to avoid – would mean a slower pace of growth in Ireland.

However, this would be on a different scale to the multiple crises our economy faced during the great recession.

Employment growth will slow, but we still expect an additional 19,000 new jobs to be created next year. 

An increase in tax revenue is also in prospect for 2020.

However, the risks associated with a possible No Deal outcome could become more severe than forecast.

So the Government stands ready to act.

My central objective in Budget 2020, which I presented earlier this month, was to provide the necessary resources to meet the impact of Brexit, while keeping our public finances on the credible and sustainable path they have been on since 2011.

Our management of the public finances means that we will meet the challenge of Brexit from a position of strength.

This year we have eliminated the deficit and are projecting a surplus of 0.2 per cent of GDP.

In the event that the UK leaves the EU with an agreement, we will continue to build on this surplus.

But should this not happen, we will intervene in a sustained and meaningful way to support jobs and the economy.

It is also essential to build resilience within the Irish economy, in order to minimise, in so far as is possible, any future disruption.

Since the referendum result in 2016, Brexit has been a central element in the Government’s decision-making, and in the management of our economic and fiscal policy.

The Irish Government has been taking steps to boost the resilience of the economy by:

  • balancing the budget;
  • reducing our debt burden; and
  • developing an ambitious capital investment and regional development plan called Project Ireland 2040.

In Budget 2020, €1.2 billion has been set aside to equip the economy to withstand adverse external events related to Brexit, and to maintain steady and sustainable improvements in living standards.

These measures build on Brexit-related provisions in each of the three previous Budgets I have presented.

We are supporting our companies to prepare for Brexit, to diversify their markets and supply chains, to develop new skills and to explore new opportunities.

Ireland’s EU membership, and our membership of the European Single Market, have been central to our success as a small, open, trading and competitive economy, and represent a core element of our economic strategy.

The best response to Brexit, which risks disrupting access to our nearest market, is for Ireland to be ever more open to the opportunities of the Single Market.

While the early post-Brexit period will be challenging, Ireland will retain the openness to trade, to investment, to ideas and to talent that represents one of our key strengths.

We will continue to explore new markets for our businesses and promote our international profile through our Global Ireland strategy, which aims to double Ireland’s global footprint.

We have, as I have outlined, made substantial preparations at national level. 

But we also have another advantage.  We do not face these challenges alone.  We do it as a member of a family of 27 Member States and all the inherent strengths those relationships bring.

Addressing shifting patterns of globalisation

The third point I want to make today is perhaps an obvious one, but nonetheless one worth making.

The world will not stand still while we in Europe resolve the challenges posed by Brexit.

We are living in a period of global uncertainty, with corresponding global challenges such as climate change and global trade instability, slowing economies and the challenges posed by migration.

As a small open economy, Ireland is a perfect example of the benefits of interconnectedness.  Our exports of goods and services accounted for some 122% of GDP in 2018.

The health of the world economy, and especially that of our main trading partners – the Euro Area, the US and the UK – is critical to our economic performance.

These are the three circles of connection I mentioned at the start of my talk.

Right across Europe and the western world, politicians are grappling with this: the challenge of keeping economies competitive and attractive to investment while also seeking to ensure all citizens can benefit from this openness and that none feel left behind.

This is not an easy challenge to resolve.

The case for strong institutions

It requires us to continue making the case for international cooperation, strong institutions, and global problem-solving.

This commitment lies behind our decision to stand for election to the UN Security Council.

It requires us to look at the global economy in ways that emphasise mutual gain.

And it requires us to take difficult decisions on issues such as climate change, migration and a range of pressing political and economic issues.

Taxation is an example, and an issue that has arisen in many of my meetings and discussions this week. Let me a say a few words about the approach Ireland is taking.

The issues and changes currently being discussed at the OECD are potentially significant. They are difficult discussions for small open economies like Ireland, but they are discussions that must take place.

I believe that Ireland’s interest lies first and foremost in this work being successful at ensuring the continuation of a stable and consensus-based international tax framework into the future. 

I also believe that unilateral measures, whether at national or regional level, only add to the problem and make agreement more difficult to reach.

We need to build a global inclusive consensus that keeps pace with technological change and works for all.

Eventual global agreement of the work at OECD would provide certainty and stability for the international tax landscape into the medium term, to the benefit of both companies and countries, and the wider global economy.

These and other challenges require us to recommit to global, shared approaches to problem-solving.


Ladies and gentlemen,

A broader challenge we all face is the shift in globalisation we are beginning to see.

A shift away from openness and free trade to closed borders and economic nationalism.

This poses particular challenges for a small country like Ireland, embedded in the global economy, of how to deal with the changing reality. I like to think of this as our new National Question.

Rather than retreating from the global economy, we must retain our outward looking, international outlook. We have built our success on openness to trade and investment, and will continue to do so. 

We need economic openness, to go hand in hand with the political and social openness we have in our society. We must remain open to innovation, people and ideas.

We need to listen to our citizens about the challenges they are facing, and provide a wider range of opportunities and economic security for them, while also protecting those most vulnerable in our society. 

The old order of globalisation, including liberal democracy, is facing greater obstacles, and Brexit is a catalyst of this change.

That does not mean that the globalised, interdependent and interconnected era is at an end, but it is clear it has changed.

We need to build a more resilient form of globalisation that recognises the concerns of citizens, while maintaining a strong case for openness.

I believe Ireland is equipped to adapt to these challenges.

And I hope we will be able to do so on the basis of an orderly UK withdrawal from the EU, in keeping with the agreement that has just been reached.

We will continue to build on our circles of connection – with the EU, the UK and the United States.

If we can succeed in doing this, we can continue to grow and find our role in this new world.