Foreign policy and defense
Ireland is a nation in Northern Europe. Its capital city is Dublin. Ireland’s foreign policy has traditionally revolved around the relationship with Britain. The long-standing mistrust between the countries was broken in the 1980s, not least since they began to work together to reach peace in the conflict in Northern Ireland. Irish membership of the EC / EU led to a decline in dependence on the UK as it placed Ireland in a wider context. In the context of the economic crisis, it sparked a great deal in the contacts between Ireland and the EU. The UK’s decision to leave the EU has caused great concern in Ireland. During the Brexit negotiations, the EU largely succeeded in keeping a united front against the United Kingdom.
The Northern Ireland issue has been a sensitive issue in contacts with the British ever since Ireland’s liberation from Britain in the 1920s. The goal of a united Ireland, which would include Northern Ireland, has long been important to all Irish governments. The wave of violence that erupted in Northern Ireland in the 1960s complicated the contacts between the countries, but from the late 1980s, governments in London and Dublin began to work together to end the conflict. In the peace agreement signed in 1998, Northern Ireland will remain part of the United Kingdom unless a majority of the province’s population chooses to be part of an Irish state.
- Countryaah: Overview of business holidays and various national observances in Ireland for years of 2020, 2021, 2022, 2023, 2024 and 2025.
A symbol of how much relations between the countries have improved was the British Queen Elizabeth II state visit to Ireland in 2011. Three years later, Irish President Michael D Higgins made a state visit to the UK, the first to have been made by an Irish head of state.
A UK exit from the EU is expected to have extra-large consequences for Ireland, whose economy is closely linked to the UK. A sensitive issue concerns the border between Ireland and Northern Ireland (see also Current Policy). Concerns are high that new border controls would severely affect trade between Ireland and Northern Ireland, but also that it would undermine the Northern Ireland peace process (see also Towards Peace). The situation was spearheaded in the Brexit negotiations between the EU and the UK in the fall of 2017. The EU refused to move on to the next step in the negotiations before the border issue had been resolved and Ireland threatened to veto a settlement which meant a “hard” border with Northern Ireland. At the same time, the largest party in Northern Ireland, the Democratic Unionist Party (DUP), opposed all thoughts of a special solution for Northern Ireland (see UK: Calendar) that the party feared would damage the ties between the province and the rest of the UK. When the UK and the EU agreed on a preliminary exit agreement in the fall of 2018, the parties had tried to resolve the border issue by forming the whole of the UK to form a customs union with the EU until a new agreement was negotiated. However, the agreement was rejected three times by the British lower house in early 2019. A new agreement became clear in the fall of 2019 after Boris Johnson became new British prime minister (see UK: Current Policy). It was finally approved by the British lower house in early 2020. In the case of Northern Ireland, the parties agreed on a solution that meant the province, at the same time as it should include the UK’s customs territory (see also Calendar) will apply some of the EU customs rules. Now, new negotiations await the future of EU-UK relations. Until the turn of the year 2020/2021, the British will continue to comply with EU regulations.
With Brexit, Ireland has lost an important political ally within the EU, with both countries opposing increased tax coordination and common defense.
However, Brexit has strained contacts between the countries and made it more difficult for them to intervene to resolve crises in Northern Ireland, which has been without government since early 2017. Theresa Mays, who took over as British Prime Minister in 2016, has not shown the same commitment to resolving crises in Northern Ireland as her representative did. Irish Prime Minister Leo Varadkar warned in November 2018 that worse relations in the long term pose a threat to the Northern Ireland peace process. Even after Johnson took over, there was tension in the contacts between Dublin and London. However, the Irish government played an active role in the negotiations that led Northern Ireland to a new government in early 2020 (see UK: Current Policy).
Ireland has been participating in the EU’s monetary union EMU since its inception in 1999 and introduced the euro as its currency three years later. However, the country has chosen to stand outside the EU passport Schengen because the British do not participate. The freedom of passport between Ireland and the UK, which has existed since 1922, has been considered to be more important to maintain. It is part of the so-called Common Travel Area (Common Travel Area, CTA) which allows the Irish without special permits to work, study, get access to various grants and seek care in the other country, and vice versa. The agreement also means that Irish citizens can vote in British elections and vice versa. However, a new agreement signed in May 2019 is not binding (see Calendar).
The Irish have generally been positive about EU cooperation, but still voted no for both the Treaty of Nice in 2001 and the Lisbon Treaty in 2008. However, the Treaties have been approved since new referendums have been held. The tours of Ireland’s 2010 emergency loans and the tough conditions imposed by the so-called Troika – the European Commission, the European Central Bank (ECB) and the IMF – to grant them led to EU cooperation being viewed with greater skepticism than before.
Ireland has close ties to the United States, where there is a large population of Irish roots. Many Irish people travel to the United States to work and study. In 2016, around 800 US companies were operating in Ireland.
The Irish government has since 2003 allowed US military planes to land at Shannon Airport in Western Ireland, which has provoked some domestic criticism.
Ireland has been neutral since independence in 1949. Neutrality policy, which has strong support in public opinion, was not linked to the East / West conflict but primarily to Britain and the issue of Northern Ireland.
Ireland has a professional army. The military will defend the country against external threats, but it is the police, Garda, who are responsible for internal security. From 2014 to 2018, military spending, in relation to GDP, was lowest in the EU.
READING TIP: read more about Ireland in UI’s publication Foreign magazine:
Brexit again raises the idea of a united Ireland (2019-02-20)
FACTS – DEFENSE
Army: 7,300 men (2017)
The air Force: 700 men (2017)
The fleet: 1 100 Men (2017)
Military expenditure’s share of GDP: 0.4 percent (2017)
Military spending’s share of the state budget: 1.3 percent (2017)
Clear sign for IMF settlement
On December 15, the Chamber of Deputies approves the government’s agreement with the IMF: 81 members vote in favor, 75 against.
Christmas bonus is stopped
13th of December
The government stops the bank Allied Irish Bank’s plans to pay out EUR 40 million in bonuses to its employees.
New protests against the savings policy
Up to 100,000 Irish people gather in Dublin to protest the cuts. The following day, EU finance ministers approve loans to Ireland, which may pay an interest rate of almost 6 percent. According to the government, this means that in 2014, almost one fifth of tax revenue will go to interest payments. Ireland needs to contribute to the loans with over € 17 billion to be taken from the state reserves and the national pension fund.
New crisis package
The Government presents yet another comprehensive austerity package which means that the budget for the next four years will be cut by one fifth, among other things, the child allowance is reduced by 10 euros a week, more Irish people have to pay income tax, people who previously worked in the public sector have their pensions reduced by 4 percent, VAT will be increased from 21 to 24 percent by 2014. Nearly 25,000 government employees are scheduled to be terminated. However, the low corporate tax rate of 12.5 percent – a sacred cow for the government – should not be raised.
Ireland applies for crisis loans
Ireland applies for assistance from the EU Support Funds and the International Monetary Fund (IMF). The emergency loan amounts to EUR 85 billion. The message provokes anger and protests in several places. Prime Minister Cowen is accused of misleading the Irish and several members of his own party, Fianna Fáil, demand his departure. The Green Party decides to leave the government as soon as the budget has been approved.
New savings in progress
New savings are announced, which are greater than previously stated. The final budget for 2011 will be presented first in December, but the government chooses to release some information in advance to calm the market. Several analysts doubt that Ireland can solve its financial problems on its own. At the same time, Ireland and other debt-laden euro countries such as Spain, Portugal and Greece may pay significantly higher interest rates on their government bonds than, for example, Germany.
Krisbank is split
The government decides to share Anglo Irish Bank, which made losses of more than EUR 8 billion in the first half of the year. One of the main reasons for the losses is that property prices have fallen by an average of 40 percent since the crisis began in 2008. The government decides to push for new money to save the bank. According to Finance Minister Lenihan, the entire rescue operation will cost taxpayers around EUR 30 billion in total.
The government concludes an agreement with the union
The government and trade unions conclude the so-called Croke Park agreement, where there is agreement on savings requirements in the public sector. The ICTU union receives promises that no salary reductions should be made other than those announced in 2009 and 2010, and that efforts should be made to reduce the personnel force on a voluntary basis. An evaluation of the agreement must be made every year.