Mr. Tony Connelly:

I thank the committee and I also thank Mr. Montgomery for his very illuminating presentation. I am delighted to have this opportunity to share some of my experiences reporting on the EU. I was one of the people outside the window trying to peer into the room in which Mr. Montgomery and senior diplomats were sitting. It is thanks to those people on the inside who are happy to co-operate with and help the media that I can essentially do my job.

I am delighted to do a quick tour of where we are at EU level and where Ireland fits. The 50th anniversary of Ireland’s membership of the EU comes at a time of real upheaval at EU level with fundamental challenges posed by the war in Ukraine, the energy crisis, enlargement and the legacy of the Covid-19 pandemic. Not only are deeply held assumptions about Europe’s security, budget, debt rules and centre of gravity being shaken on an almost monthly basis; the EU has been more or less in crisis mode since the financial crash of 2008. Since 2008, we have had the eurozone crisis, the debt crisis and the Greek and Irish bailouts. We have also had a long period of turbulence involving terrorism and the migration crisis in 2014 and 2015. That brought us to Brexit, which was another existential moment for the EU. Brexit is still obviously with us but we then had the Covid pandemic and the war in Ukraine so the EU has had a long period of crisis and turbulence. There has not been a period of settled calm for about 15 years.

During these upheavals, EU unity has been severely tested, not least by Brexit and the pandemic. The crises appear to have strengthened the EU’s internal unity, somewhat paradoxically because a lot of people thought Brexit would really tear the EU apart with some countries wanting a much more favourable relationship with and much more flexible approach to the UK while other countries did not. Despite a lot of attempts by the UK to bilateralise the whole process of Brexit, unity prevailed and was a key aspect of the Brexit process. Ireland benefited enormously from that sense of unity and solidarity.

The Ukraine war is seen as an existential threat to the multilateral, rules-based order, of which the EU is a pre-eminent part. Despite unity, there are divisions and fault lines within the EU. Depending on the issue, there are shifting and competing blocs along several axes such as north versus south, east versus west, debtor versus creditor, those who are tough on Russia versus those who want a bit more understanding for Russia, NATO members versus neutral member states, coastal versus non-coastal, migration facing countries versus non-migration facing countries and energy-dependent countries versus energy-self sufficient countries. The challenge for Ireland is navigating these different divisions and shifting positions and situations. This is going to be a challenge.

The EU’s unique, if slow, and sometimes bruising system of policy making does tend to deliver clear outcomes in the end mostly through consensus rather than via polarising votes at Council level but it will require vigilance on Ireland’s part to navigate the various blocs and policy choices through the rest of the decade.

I can give some figures on the question of Ireland's contribution to the EU budget because this will inform the debate in Ireland. Ireland has been a net contributor since 2013. In 2019 the net contribution was €0.5 billion so that represents €1.9 billion received and paying in €2.4 billion. From the €1.9 billion received 85% goes to the agricultural sector and to rural development projects. There are also direct payments to research funding. Overall, Ireland received €1.5 billion for sustainable growth and natural resources, €430 million for smart and inclusive growth and €24 million for security and citizenship. The impact of Brexit and Ireland's strong economic performance means Ireland will remain a net contributor to the EU for the foreseeable future.

I will say a bit about what the EU has been doing at budget level. As the committee knows, there was the Covid-19 pandemic recovery fund which, combined with the seven-year annual budgets running to 2027, combines to an amount of €1.8 trillion. This is designed to mitigate the impact of the pandemic but also to refit the European economy to be much more aligned to the digital age and to help Europe to meet its climate goals. Ireland will receive €1 billion from the recovery and resilience facility. To compare that to Italy which will receive €220 billion, that is an indication of the way the Irish economy is viewed by the EU in terms of responding to something like the Covid-19 pandemic and how Italy has to respond and to have a much more radical reboot of its economy. A lot of that work was championed and put through by the then Italian Prime Minister, Mr. Mario Draghi. A big issue at the moment is whether the current Italian Prime Minister, Ms Giorgia Meloni, will be able to continue with that budget programme. Ireland will also receive €89 million from the ReactEU fund which is essentially a top-up to regional and social funds, and €77 million from the just transition fund. That is designed to help member states to meet climate targets.

When the UK was a member, as Mr. Montgomery touched on, Ireland had the luxury of sheltering behind the well-researched and well-argued UK position on things like taxation, trade, the Single Market, and justice and home affairs. With the UK departure Ireland now has to seek new alliances, for example by joining what is called the New Hanseatic League or the bad weather club, that involves the Netherlands, Denmark, Estonia, Lithuania, Latvia, Finland and Sweden. This is a group of countries emphasising balanced budgets and caution in EU spending, that Economic and Monetary Union, EMU, should be strengthened without transferring new powers to Brussels and with the idea that citizens have to be kept on board at all times during a crisis. That was one of the problems of the debt crisis, especially in Greece. Despite aligning itself with the Hanseatic position of a much more frugal approach to spending Ireland did actually align itself with the Franco-Mediterranean approach in 2020 when it joined France and others in looking for a much more robust and bigger bazooka in terms of EU spending and borrowing to meet the needs of member states after the Covid-19 pandemic. Ireland obviously wants to be flexible enough to be able to shift between different blocs and that will take quite a bit of dexterity. I am sure Mr. Montgomery will have something to say on that.

Ireland is now the only member state, as far as I am aware, with an embassy in every other EU capital. That represents a very significant financial commitment and reflects the importance of building alliances with both small and large member states. Ireland relied very heavily on former German Chancellor, Ms Angela Merkel's, understanding and sympathy during the Brexit negotiations. With the new coalition in Berlin Ireland had done a lot of work, I think perhaps at political level through the Green Party, to get a foothold in the German thinking and that is why the programme for government in Berlin actually mentions the requirement of the UK to abide by the Northern Ireland protocol. France of course is now Ireland's closest member state geographically so that is another bond that has to be worked on very carefully.

The Brexit negotiations represented a graphic and nail-biting challenge which tested Ireland's diplomatic skills to the limit. It is important to remember that it was not a given at the outset that Ireland would get this support and solidarity. For the Irish Government, the initial concern was trade and the fact its very close and very important trading partner would suddenly be trading under much more trade friction. The Northern Ireland issue came in on the slipstream of that but it is important to remember that for a long time, as Mr. Montgomery can attest to, a lot of the work between Dublin and Brussels was looking at ways of having as soft a Border as possible. They were looking at technical solutions and looking at other border examples around the European Union. It then became a much more political project to try to shift the UK out of its comfort zone and come up with its own solutions rather than put the responsibility on Ireland and the EU to figure out how to deal with the Irish Border. It was not a given that the EU would have that solidarity at the outset but it clearly evolved as we went along and once that solidarity and support became embedded in the DNA of the negotiations it was very hard to shift. The more Ireland was supported and the more Ireland successfully outsourced the Brexit process to Michel Barnier and the European Commission and the European Council, the harder it was for individual member states to depart from the orthodoxy that Ireland's interests would have to be protected.

The question is what that means once we get beyond Brexit, and we may never get fully beyond it but we seem to be entering a bit of an end game at the moment. What will that mean for Ireland's position once the innate sympathy for Ireland dissipates? I think we will start to get into bigger geopolitical existential issues at EU level around security, defence and migration. These are issues that Ireland has always had not quite such a pre-eminent and prominent role and that will be a challenge over the coming years. We do not know where the Ukraine war will end up but, as I mentioned at the start, a lot of the assumptions about European security are being upended. Ireland will have to be fairly dexterous in how it positions itself in these debates.

I am happy to take questions on any of these subjects. I will leave it there. Thank-you.