The financial and political prophets of doom have been having a field day since Boris Johnson became Prime Minister, with an almost daily dose of the ills that will supposedly befall Ireland if the UK exits the European Union on Halloween Night with a ‘no deal’.
The warnings over ‘no deal’ read like an economic version of the Biblical book of Revelations and Earth’s last days. The current pessimism about ‘no deal’ is, understandable, based on the likely short-term disruption to trade that would ensue. But we must be careful not to lose sight of the bigger picture. As is the case at present, the European Union won’t be the only economic show in town for Ireland, north and south of the border, after 31 October.
Surely there are enough political and economic brains throughout the island who could devise a economic strategy which might even be able to take advantage of ‘no deal’ for the benefit of Ireland as a whole, and cross-border trade in particular.
So, in a ‘no deal’ scenario, the question becomes: is there a workable pathway with Ireland at the centre? Yes, there is: the United Kingdom, United States and Canada may well already be in the process of forming what has become known as the Trans Atlantic Alliance (TAA) as a radical global alternative to the severely under-pressure Eurozone. NATO has tried to see the development of the TAA in a post Cold War security scenario rather than an economic way forward post Brexit.
The first hints of this slowly emerging relationship can be traced back to a few years ago when former British PM David Cameron decided not to bless the so-called rescue package for the Euro currency, much to the annoyance of France and Germany.
Rather than Cameron’s apparent snub to the Euro being labelled a desperate move to calm his Conservative Party’s growing Eurosceptic right-wing or indeed fly the patriotic flag for sterling, perhaps it was a telling ploy to set up an economic alternative to the Euro based on the pound and dollar.
So just as the row over whether ‘no deal’ should be back on the negotiating table, so too should the plan to form a united front with the dollar and sterling to compete with the euro.
Its long-term aim would be to bring other nations out of the financial aspects of the European Union and into the TAA. For many nations who joined the EU, the Eurozone had the impression of being a stronger currency location than their former individual currencies, especially for those nations linked to the former Soviet bloc. The key question facing governments in the Eurozone - which would provide a better standard of living for their communities, the euro versus a combined pound/dollar? The TAA is not seeking the political break-up of the EU, merely to set up in opposition to the seemingly crumbling Eurozone.
The test case for the fledgling TAA will be the Republic of Ireland, which has been lumbered with massive debt following the multi-billion Euro bailout to save the Irish economy – dubbed the Celtic Tiger – from tumbling into the same financial pitfall as Greece and Portugal.
Southern Ireland is currently part of the Eurozone and its land border with the North means it is the only EU state with such a physical link to the UK. The Northern Ireland peace process has become a global example of the art of the politically impossible.
In financial terms, what was unthinkable a decade ago is now creeping slowly onto the political agenda – a re-introduction of the Irish pound, and closer ties with the UK, possibly even the negotiation of a new Anglo-Irish Treaty. In hard cash terms, could a parity between the Irish punt and British sterling be the solution to avoiding the consequences of a hard border in Ireland post Brexit?
Ireland’s role is crucial to the TAA’s development. It must not be forgotten the role which Ireland plays in the TTIP - the Transatlantic Trade and Investment Partnership. The UK and North America have retained their respective currencies. What the TAA urgently requires is for a significant member of the Eurozone to defect.
Given that growing economic concern in the Republic over ‘no deal’, if the Dáil – the Irish Parliament – could be persuaded to leave the Eurozone, re-introduce its former currency, then the financial floodgates could open.
The growing political warmth between the UK and the Dáil, and especially the success of the British-Irish and Northern cross-border bodies make the Republic a prime target for such a defection. The Republic of Ireland would not be alone in this process.
If the likes of Ireland, even Hungary (which is not in the Eurozone presently), were to turn away from the EU, it would provide the British and North Americans with the political muscle they require to back the influential French and German governments into a corner. In both these cases, financially and politically, the TAA agenda would ultimately have to be Irexit for Ireland and Hungexit for Hungary from the current EU.
Politically, this TAA would not seek to disband the EU but rather encourage the EU to return to the original European Economic Community (EEC) it once was - a more loose alliance of European nations with individual currencies. Political primacy would also be held by these nations’ respective sovereign parliaments – not the European Parliament.
Under a ‘no deal’ scenario, the UK can bypass the EU in terms of developing the TAA using the Commonwealth Parliamentary Association (CPA) banner. Ireland, north and south, can benefit tremendously from these arrangements. The short-term pain of transition from the Eurozone back to the sterling/dollar zone provided by the TAA and CPA would result in long-term gain for Ireland as an island economy. Cross-border trade could continue; Southern Ireland would be part of the UK’s dealings with other major financial players, such as China, Brazil, and India without the need to consult the EU. There would also be the cross-border security issue whereby the Gardai and PSNI would be allowed to operate in each other’s jurisdictions to combat crime, especially the illegal drug trade and any terrorism threat which emerged as a result of Brexit.
Leinster House needs to think positively about how ‘no deal’ can boost the Southern Irish economy, but it will - in reality - require the bold step of replacing the euro by reintroducing the punt; a move which could retain the so-called ‘invisible border’ established by the peace process. In the short term, there would be some inevitable disruption, but as with the Good Friday Agreement peace process, it would take some time to reap the benefits once the process bedded in. Ironically, it could give the Irish economy more independence if it had full control over its own currency rather than be part of the single market.
Listen to religious commentator Dr John Coulter’s programme, Call In Coulter, every Saturday morning around 9.30 am on Belfast’s Christian radio station, Sunshine 1049 FM. Listen online at www.thisissunshine.com