Disadvantages to Ireland of EU Membership

murphaph · 12-12-2011 02:18PM

mistermouse wrote: »

Ireland I feel has always pandered to Europe, more so than other nations and still does. We always want to be seen more European than the Europeans and go out of our way to be the first to implement everything that comes from there

This is quite far from reality. Ireland is often fined for not implementing this or that directive in time. The whole septic tank business is another long ignored EU directive that's having to be implemented in a rushed manner now.

Ironically the British are amongst the quickest to implement the various EU directives in their national legislation

wiseguy · 12-12-2011 02:23PM

Laois_Man wrote: »

Why would they want to leave?
People seem to think they're gonna run off to places like France.
Why would they? If corpration tax is harmonized, it means France have a rate the exact same as ours!

People ignore the other advantages we bring to the table over countries like France for FDI from the US. Eg, we have a lesser time difference with the US, English is our spoken language and we have huge technical expertise from all over the world already assembled. It costs a lot of money to re-establish and, especially in the technological sector, you lose a hell of a lot of company specific technical knowledge

Again, I don't buy into any of this bull**** about the 12.5% corp tax being the ONLY reason so many muli nationals are in Ireland. Especially since our corp tax rate is actually 25% for non-trading income, passive income or foreign trading income!

Erm let me spell it out for you

Lets say corpo tax is same here as rest of EU, then it stops being a variable
and companies start paying attention to other variables such as high labour costs in Ireland, high energy costs, redtape, lack of talent and being farther away from core markets due to our location.

Take Dell, they moved their manufacturing despite the low corpo rate due to lower wages elsewhere in EU, but some part of their operations remained in Dublin keeping people employed due to the low rate. Once this only advantage that this economy has is pissed away, then companies like this will move altogether leading to more job losses.

And btw its not just the corporate rate thats important but the loopholes which allow the likes of Google to operate here, otherwise they would remain in London or US or continent.

Doc Ruby · 12-12-2011 02:28PM

Technically the only thing we really need from Europe is access to the single market. The euro is pretty handy too, but we were doing alright without it. The rest, well if it vanished tomorrow we'd still keep ticking over.

wiseguy · 12-12-2011 02:33PM

Doc Ruby wrote: »

Technically the only thing we really need from Europe is access to the single market. The euro is pretty handy too, but we were doing alright without it. The rest, well if it vanished tomorrow we'd still keep ticking over.

Well said and despite any threats from Merokozy lets remember that they can not kick us out of the single market (never mind the euro) no matter how much they would like to, since it would mean the collapse of the EU and the euro which would be as bad if not worse for them.

Laois_Man · 12-12-2011 03:30PM

wiseguy wrote: »

Erm let me spell it out for you

Lets say corpo tax is same here as rest of EU, then it stops being a variable
and companies start paying attention to other variables such as high labour costs in Ireland, high energy costs, redtape, lack of talent and being farther away from core markets due to our location.

Take Dell, they moved their manufacturing despite the low corpo rate due to lower wages elsewhere in EU, but some part of their operations remained in Dublin keeping people employed due to the low rate. Once this only advantage that this economy has is pissed away, then companies like this will move altogether leading to more job losses.

And btw its not just the corporate rate thats important but the loopholes which allow the likes of Google to operate here, otherwise they would remain in London or US or continent.

But those variables you meantion are really applicable most in manufacturing which has been screwed here long before now anyway! The vast majority of these multi nationals who we are so afriad of losing here in the IT sector! IT doesn't rely on a rail network, huge energy resources and a Software Engineer in France costs MORE to hire than it does here (although the more senior levels are more expensive here but isn't a huge difference on either side)

http://www.payscale.com/research/IE/Country=Ireland/Salary

http://www.payscale.com/research/FR/Country=France/Salary

wiseguy · 12-12-2011 03:39PM

Laois_Man wrote: »

But those variables you meantion are really applicable most in manufacturing which has been screwed here long before now anyway! The vast majority of these multi nationals who we are so afriad of losing here in the IT sector! IT doesn't rely on a rail network, huge energy resources and a Software Engineer in France costs MORE to hire than it does here (although the more senior levels are more expensive here but isn't a huge difference on either side)

http://www.payscale.com/research/IE/Country=Ireland/Salary

http://www.payscale.com/research/FR/Country=France/Salary

It is not just the IT sector, 30,000 people work in IFSC where financial transaction tax would affect them more than corporation rate||loophole changes with jobs going to London or back to US.

But if you want to discuss the IT sector {of which I am part of} then I have seen datacenters in France that make datacenters in Ireland look like Mickey Mouse operations, their electricity is also 2x cheaper {thanks to nuclear}
While in Netherlands has even better datacenters and world class connectivity with largest internet exchanges! Where quality bandwidth is 10x cheaper than here. We are already loosing jobs to these places, or take Cyprus with its 10% corporation rate and much simpler tax system where alot of Gaming and Gambling companies have moved||based.
Continuing on the subject of IT, Eastern Europe is a great threat, I have seen some incredibly bright guys from Romania and Bulgaria, and in the last year have seen and used colocation services that are much cheaper than Ireland with better support (24x7!), in English too and better connectivity.

BTW my own company has already moved most of its operations out of Ireland due to this place being a cesspit that is getting nastier.

14-12-2011 05:14PM

hmmm wrote: »

Why are we even debating this point? Of course we wouldn't have a tenth of the FDI if we were not part of the EU - the only reason they are here is because they can access EU markets.

If we were on our own, do you think Intel would have set up a plant to sell into the Irish market only?

Yes they would still have come here if we were on our own.
One of the main reasons Intel and the various technology outfits (worked for one of them for a time) came here was that we were the only nation in the western world exporting good engineering/technical graduates.
We had a good education system, English speaking and a huge surplus of good science/engineering graduates to pull from, this did not exist anywhere else at the time.
Unfortunatly no longer the case.

kippy · 14-12-2011 05:36PM

323 wrote: »

Yes they would still have come here if we were on our own.
One of the main reasons Intel and the various technology outfits (worked for one of them for a time) came here was that we were the only nation in the western world exporting good engineering/technical graduates.
We had a good education system, English speaking and a huge surplus of good science/engineering graduates to pull from, this did not exist anywhere else at the time.
Unfortunatly no longer the case.

And I wonder where the country got the money/policies to be able to put all these students through college/university......nothing to do with EU membership?
While that MAY have been a reason, I do believe being a member of the EU with access to that market was the major one and almost any other reason you can find for them coming here, could plausibly be as a direct or indirect result of EU membership.

Just as an aside,
something which might assist those those who think joining/remaining in the eurozone is a bad idea:
http://ec.europa.eu/ireland/ireland_in_the_eu/impact_of_membership_on_ireland/index_en.htm

Godge · 14-12-2011 05:43PM

Rojomcdojo wrote: »

A prime example of the way the corporation tax issue has been sold to the us. Our corporate tax rate of 12.5% has only been in effect since 2003. Before that I believe it was something like 32%. We were doing fine when it was 32%.

Why is this such an issue with us as a country? That, in my opinion, is the most important question.

Oh dear.

Prior to 2003 (or whenever it changed), we had a corporation tax regime that taxed foreign multinational manufacturing exports at 10%, while the general corporation tax regime for profits made in the Irish market or on international services was 32%. The EU told us that this regime was illegal so we changed the rate for trading profits to 12.5% and non-trading profits to 25%. (It is slightly more complicated than that and the Wikipedia entry below is not entirely correct but that is the main gist of it)

So for the likes of Intel, the tax rate went from 10% to 12.5%. As a result corporation tax revenue increased from 2003 to 2007, despite the cut from 32% to 12.5% for other categories of profits.

http://en.wikipedia.org/wiki/Corporation_tax_in_the_Republic_of_Ireland

A simple google search would have given you that information.

Godge · 14-12-2011 05:48PM

Laois_Man wrote: »

But those variables you meantion are really applicable most in manufacturing which has been screwed here long before now anyway! The vast majority of these multi nationals who we are so afriad of losing here in the IT sector! IT doesn't rely on a rail network, huge energy resources and a Software Engineer in France costs MORE to hire than it does here (although the more senior levels are more expensive here but isn't a huge difference on either side)

http://www.payscale.com/research/IE/Country=Ireland/Salary

http://www.payscale.com/research/FR/Country=France/Salary

Now maybe I am ignorant and stupid, but I thought the greatest contribution to our exports was being made by manufacturing pharmaceutical products for export?

Nothingbetter2d · 14-12-2011 06:30PM

kippy wrote: »

it has been member of the EU/EC/EEC/EUROPE or whatever you want to call it.

cant we just call it the United States of Germany from now on :rolleyes:

kippy · 14-12-2011 06:31PM

Nothingbetter2d wrote: »

cant we just call it the United States of Germany from now on :rolleyes:

No, because that's not accurate in any way, shape or form.

14-12-2011 06:47PM

Godge wrote: »

Oh dear.

Prior to 2003 (or whenever it changed), we had a corporation tax regime that taxed foreign multinational manufacturing exports at 10%, while the general corporation tax regime for profits made in the Irish market or on international services was 32%. The EU told us that this regime was illegal so we changed the rate for trading profits to 12.5% and non-trading profits to 25%. (It is slightly more complicated than that and the Wikipedia entry below is not entirely correct but that is the main gist of it)

So for the likes of Intel, the tax rate went from 10% to 12.5%. As a result corporation tax revenue increased from 2003 to 2007, despite the cut from 32% to 12.5% for other categories of profits.

http://en.wikipedia.org/wiki/Corporation_tax_in_the_Republic_of_Ireland

A simple google search would have given you that information.

Ah, I stand corrected. I was understanding things in the French sense of (not understanding things) taking the initial rate of taxation at face value. How embarrassing :P

Rookie mistake, I'll blame it on exams!

K-9 · 14-12-2011 08:01PM

Godge wrote: »

Oh dear.

Prior to 2003 (or whenever it changed), we had a corporation tax regime that taxed foreign multinational manufacturing exports at 10%, while the general corporation tax regime for profits made in the Irish market or on international services was 32%. The EU told us that this regime was illegal so we changed the rate for trading profits to 12.5% and non-trading profits to 25%. (It is slightly more complicated than that and the Wikipedia entry below is not entirely correct but that is the main gist of it)

So for the likes of Intel, the tax rate went from 10% to 12.5%. As a result corporation tax revenue increased from 2003 to 2007, despite the cut from 32% to 12.5% for other categories of profits.

http://en.wikipedia.org/wiki/Corporation_tax_in_the_Republic_of_Ireland

A simple google search would have given you that information.

The Corporation tax rate was gradually reduced over about 4/5 years from memory and I think the IFSC relief might have lasted until a couple of years ago. In many ways those reliefs have been replaced by easier tax regulations instead, which is what the CCTB is getting at and why its a threat to Ireland.

Fromthetrees · 14-12-2011 08:34PM

Since we entered the EEC, Ireland has had a net return of €41 billion, this is clearly an advantage.

Total foreign bank exposure to Ireland’s economy is $844bn, or five times the value of Ireland’s GDP or economic output. Of that, German and UK banks are Ireland’s biggest creditors, with €206bn and €224bn of exposure respectively.

To put it another way, German and British banks on their own have each extended credit to Ireland greater than Irish GDP. Which doesn’t sound altogether prudent, does it?

As for direct bank-to-bank lending, overseas banks have provided Ireland’s banks with €169bn of loans, which is also greater than Irish GDP.

If our European 'partners' don't share the (is it?) 70 billion worth of debt being put on Irish taxpayers than I will no longer believe Europe has Ireland's best interests at heart.

K-9 · 14-12-2011 09:04PM

Fromthetrees wrote: »

Since we entered the EEC, Ireland has had a net return of €41 billion, this is clearly an advantage.

If our European 'partners' don't share the (is it?) 70 billion worth of debt being put on Irish taxpayers than I will no longer believe Europe has Ireland's best interests at heart.

We also have big opportunities for exports, particularly multi nationals, people forget that, plus our tax rate makes us attractive because we are in the EU and Euro.

hmmm · 14-12-2011 09:10PM

Fromthetrees wrote: »

Since we entered the EEC, Ireland has had a net return of €41 billion, this is clearly an advantage.

Where do you get this 41 billion figure?

Ireland's economy (about 100 billion a year) is largely based on access to EU markets.

Fromthetrees · 14-12-2011 10:26PM

hmmm wrote: »

Where do you get this 41 billion figure?

Ireland's economy (about 100 billion a year) is largely based on access to EU markets.

I read it somewhere a few months ago, did a quick google there and found this article from 2004 stating it was 34 billion.

Germany has been the leading contributor to Ireland's net receipts of €34 billion since joining the then European Community in 1973-the amount would be considerably higher if stated in current money values. I accept it's actually higher.
http://www.finfacts.ie/comment/irelandeunetreceiptsbenefits.htm
I don't think anyone would want to halt access to the EU, that would be madness, it's not my point. The European Free Trade Association I think would be a far better route to go down in my opinion. I don't want to be in a United States of Europe, we'd be the equivalent of Leitrim County Council the more we integrate with Europe. We don't need the euro, we need to be able to control our own interest rates, we need to keep our corporation tax rate and Sarkozy shouldn't even have an opinion on it, deciding our own foreign policy ect. The road we're going down to me seems to end with the EU having more control than the people we elect. Our politicians are generally inept but at least they're accountable to the people, Eurocrats are not.

hmmm · 14-12-2011 10:41PM

Fromthetrees wrote: »

I read it somewhere a few months ago, did a quick google there and found this article from 2004 stating it was 34 billion.

Germany has been the leading contributor to Ireland's net receipts of €34 billion since joining the then European Community in 1973-the amount would be considerably higher if stated in current money values. I accept it's actually higher.
http://www.finfacts.ie/comment/irelandeunetreceiptsbenefits.htm

That's purely the amount of EU structural funds (and I guess CAP funds) that have been received by Ireland. Those have been invested in roads, education & farmers pockets. The benefits of access to EU markets however vastly outnumber this figure.

The European Free Trade Association I think would be a far better route to go down in my opinion.

The three big implications of EFTA membership for Ireland would be:
i) We would no longer receive funds from Europe and would have to pay for access to EU markets.
ii) We would have to apply most EU regulations as a condition of access and would have no means of influencing those regulations."This situation has been described as a “fax democracy”, with Norway waiting for their latest legislation to be faxed from the Commission." * Europe could for example very easily deem our corporation tax rate unfair competition and ban access to their markets.
iii) Why would a multinational choose to invest in Ireland when it could invest in a full EU member? If someone like Intel is planning a 20 year investment, are they going to choose a country which has a reputation for capricious decision making.

The only way to protect our corporation tax and standard of living is by being at the decision making table and by creating alliances. That can only occur within the EU, and probably, within the Eurozone.

* http://en.wikipedia.org/wiki/European_Economic_Area

Dob74 · 14-12-2011 10:45PM

Joining the euro was or biggest mistake.
Of the class of 73 Denamrk and the UK had the sence to stay out.
We do not belong with the Germans and French, we should stay closer to the Brits and Yanks.

Icepick · 14-12-2011 11:35PM

Dob74 wrote: »

We do not belong with the Germans and French, we should stay closer to the Brits and Yanks.

Why?

Jippohead · 15-12-2011 12:46AM

Why would we want to stay closer to the brits or the yanks? Is it because Irish people follow Arsenal/Liverpool/Man Utd and the X-factor? Give me a break, neither the States or the UK give a genuine fiddlers about Ireland.

Being at the negotiating table in the EU and actually standing up for ourselves, instead of hiding under the skirts of the brits and yanks would be my preferred choice.

K-9 · 15-12-2011 01:18AM

Jippohead wrote: »

Why would we want to stay closer to the brits or the yanks? Is it because Irish people follow Arsenal/Liverpool/Man Utd and the X-factor? Give me a break, neither the States or the UK give a genuine fiddlers about Ireland.

Being at the negotiating table in the EU and actually standing up for ourselves, instead of hiding under the skirts of the brits and yanks would be my preferred choice.

Considering we owe more to US and UK banks than German or French ones and the UK and US are hardly examples of burning bondholders, I'm not so sure.

This is political power play and Ireland is irrelevant, particularly on its own.

Fromthetrees · 15-12-2011 01:24AM

hmmm;]That's purely the amount of EU structural funds (and I guess CAP funds) that have been received by Ireland. Those have been invested in roads, education & farmers pockets. The benefits of access to EU markets however vastly outnumber this figure.

I know but whatever we decide we will still have access to the EU markets.

The three big implications of EFTA membership for Ireland would be:
i) We would no longer receive funds from Europe and would have to pay for access to EU markets.
ii) We would have to apply most EU regulations as a condition of access and would have no means of influencing those regulations."This situation has been described as a “fax democracy”, with Norway waiting for their latest legislation to be faxed from the Commission." *
iii) Why would a multinational choose to invest in Ireland when it could invest in a full EU member? If someone like Intel is planning a 20 year investment, are they going to choose a country which has a reputation for capricious decision making.

The only way to protect our corporation tax and standard of living is by being at the decision making table and by creating alliances. That can only occur within the EU, and probably, within the Eurozone.

* http://en.wikipedia.org/wiki/European_Economic_Area

Well we're going to become a net contributor in 2013 to the EU and I would presume that this will be the situation then forever. I mean when we first signed up to join the ECC in the 70s the advantages far outweighed the disadvantages, I believe we're reaching a point of diminishing returns now or at least in the near future. I mean why is power being more and more centralised in Brussels, to me, it makes no sense, I think a better way forward would be to have more and more power localised.
To be fair I don't think we would change many of the regulations set down by the EU even if we left as they are generally for the benefit of society.

Europe could for example very easily deem our corporation tax rate unfair competition and ban access to their markets.

If they wanted to do this they could do it either way, realistically though I can't see the EU doing that to Ireland.

There's plenty of FDI to countries outside the EU, Norway and Iceland do just fine.
I think the best way to protect our standard of living is by making alliances with the EU, the US and the BRIC countries, there's no reason why we can't tap into other economies more.

K-9 · 15-12-2011 01:55AM

Fromthetrees wrote: »

Well we're going to become a net contributor in 2013 to the EU and I would presume that this will be the situation then forever.

That was a couple of years ago, things have changed a tad since, it wont be 2013

There's plenty of FDI to countries outside the EU, Norway and Iceland do just fine.

THey've huge natural resources. We are the biggest attractor of US FDI. For some reason people seem to think to think that will continue leaving the Euro.

I think the best way to protect our standard of living is by making alliances with the EU, the US and the BRIC countries, there's no reason why we can't tap into other economies more.

We are currently doing that, the US in particular. THe BRIC countries not so good but we are playing catch up there. Being a small country with huge currency fluctuations isn't that attractive.

Scofflaw · 15-12-2011 02:40AM

Well we're going to become a net contributor in 2013 to the EU and I would presume that this will be the situation then forever.

No, I don't think so. That was based on the data available up to 2008, which had a constantly rising level of Irish contribution based on our GNI and VAT position - this was then projected forward.

Our contributions were in fact at their highest in 2008:

Year|Contribution (€bn)
2005|1.5
2006|1.53
2007|1.57
2008|1.59

Projections based on continued growth meant that our expected contribution by 2013 would have been higher than our expected receipts (c. €1.9bn).

Of course, as we know, it didn't work out that way, and instead our contributions have fallen back fairly dramatically:

Year|Contribution (€bn)
2009|1.49
2010|1.35

Even assuming we returned over the next couple of years to the galloping growth of the Tiger years, it will still take us several years to reach where we were in 2008, never mind where we were supposed to be in 2013!

cordially,
Scofflaw

Scofflaw · 15-12-2011 02:48AM

Total foreign bank exposure to Ireland’s economy is $844bn, or five times the value of Ireland’s GDP or economic output. Of that, German and UK banks are Ireland’s biggest creditors, with €206bn and €224bn of exposure respectively.

To put it another way, German and British banks on their own have each extended credit to Ireland greater than Irish GDP. Which doesn’t sound altogether prudent, does it?

As for direct bank-to-bank lending, overseas banks have provided Ireland’s banks with €169bn of loans, which is also greater than Irish GDP.

These figures are, as usual, the Basel BIS locational banking figures. As such, they're entirely useless, because they record the very large amounts of foreign money going through the IFSC. The maximum lending by eurozone banks to the Irish bailed out banks is, instead, about €15bn, about €8bn of which is still there.

So, while can certainly ask them to share in the €70bn of Irish bank debt taken on by the State, it's something that had nothing to do with them.

cordially,
Scofflaw

Dont be at yourself · 15-12-2011 02:04PM

The three big implications of EFTA membership for Ireland would be:
i) We would no longer receive funds from Europe and would have to pay for access to EU markets.

How much funding (not loans!) are we likely to be getting in the future? That's an honest question btw, because I have no idea. Also, how much would we have to pay for market access as an EFTA member, and could this be covered by becoming more competitive than we would be under a more harmonised EU? I mean, if we stick the current path, bump up our corporate tax to please the French, keep our wages and social budget sky high, couldn't we potentially lose more than the cost of accessing EU markets as EFTA members?

ii) We would have to apply most EU regulations as a condition of access and would have no means of influencing those regulations."This situation has been described as a “fax democracy”, with Norway waiting for their latest legislation to be faxed from the Commission." * Europe could for example very easily deem our corporation tax rate unfair competition and ban access to their markets.

What kind of laws are Norway and Iceland forced to enact? (Again, an honest question). I see Iceland has a relatively low corporate tax, but I don't expect they can be mandatedto change it. Just how much soverignity does an EFTA member give up, and how does that compare to the current path of EU membership? I expect that our fax machine from Brussels would be a lot busier in the latter.

iii) Why would a multinational choose to invest in Ireland when it could invest in a full EU member? If someone like Intel is planning a 20 year investment, are they going to choose a country which has a reputation for capricious decision making.

There's another side to that coin, though. Look at the likes of Switzerland - they get a lot of foreign investment, precisely because they're not a full EU member. As an English-speaking EFTA member with the capacity to ignore a lot of EU legislation and impose our own tax rates and so on, aren't we possibly even more of an attraction?

The only way to protect our corporation tax and standard of living is by being at the decision making table and by creating alliances. That can only occur within the EU, and probably, within the Eurozone.

Traditionally, some of our strongest political and economical alliances have been with the UK and the US. The former is very euro-sceptic, and I'm not so sure that the US cares so much about us being at the table in Brussels - they just want to use us a staging ground for the European market.

I don't know if it's possible, but to me being a member of EFTA, outside the EU, with stronger ties to the UK and US (and other North Atlantic countries like Norway and Iceland) would be the best of both world.

Raskolnikov · 15-12-2011 02:27PM

hmmm wrote: »

The only way to protect our corporation tax and standard of living is by being at the decision making table and by creating alliances. That can only occur within the EU, and probably, within the Eurozone.

Creating alliances and being at the decision making table; where are you getting the idea that we have any influence in Europe anymore? Why would Germany (or to a lesser extent, France) take any notice of us? No one is going to want to anchor themselves next to a failed state on Eurozone/IMF life support. No one is going to listen to a country on the edge of the Europe that makes up 1% of the EU. No one is going to want to befriend a country that used a predatory tax regime to draw foreign investment out of their home countries to us.

Scofflaw · 15-12-2011 03:03PM

Dont be at yourself wrote: »

How much funding (not loans!) are we likely to be getting in the future? That's an honest question btw, because I have no idea.

We were supposed to become net contributors in 2013, but instead it looks more like we'll be getting about €0.5bn - €1bn a year in net subsidies for probably most of the next decade.

Dont be at yourself wrote: »

Also, how much would we have to pay for market access as an EFTA member, and could this be covered by becoming more competitive than we would be under a more harmonised EU?

Not sure, since it would depend on which EU programmes we wanted to actively participate in. Norway is expected to contribute €290m in 2013.

Could the contribution be covered by "becoming more competitive"? Probably - the question is whether we would become more competitive or less.

Dont be at yourself wrote: »

I mean, if we stick the current path, bump up our corporate tax to please the French, keep our wages and social budget sky high, couldn't we potentially lose more than the cost of accessing EU markets as EFTA members?

We're not required to do any of those things to be in the EU.

Dont be at yourself wrote: »

What kind of laws are Norway and Iceland forced to enact? (Again, an honest question). I see Iceland has a relatively low corporate tax, but I don't expect they can be mandatedto change it. Just how much soverignity does an EFTA member give up, and how does that compare to the current path of EU membership? I expect that our fax machine from Brussels would be a lot busier in the latter.

All of them, bar any agreed areas of exclusion. There's a couple of long answers to this, from review papers on Norway's EU relations:

Norway is associating selectively with the EU, joining in its activities where this suits, and keeping at a greater distance where it is less convenient. In this way, it secures its priority objectives, while retaining considerable autonomy and independence. That would seem to be the idea. However a hard-headed look at what is actually happening to Norway on the European landscape suggests a less comfortable pattern across five major blocks of policy:

Legally secure market access: The EEA secures this, but at the price of intrusive legislation and regulation that goes deep into domestic economic policy-making. The EU decides the policy and the EEA associates have to apply it. The EEA has some institutional features of a club of equal members, but this has an element of political window-dressing since it does not touch policy-making. Even if Norwegian enterprises have secure legal access to the EU market, there is some evidence that the EEA regime leaves open a political uncertainty factor that may reduce the attractiveness of Norway as an investment location for mobile capital.

and:

The project materialized in 1992 when member countries of EC and EFTA signed an agreement to create a vast market of over 370 million consumers in which goods, capital, services and persons would move freely. The agreement also provided member countries with a set of cooperative schemes in domains such as research and development, education, consumer policy, social policy, and the environment. But EFTA countries had to pay a high price for gaining a privileged access to the Single Market. The EC took full control of decision-making, imposed its agenda on EFTA countries, and even forced EFTA to build up some supranational structures. This price proved to be too high and quickly transformed the EEA into an obsolescent framework.

and:

On the side of the EFTA states, it became evident early on that the EEA would not be satisfactory, and their governments soon came to regard it as a stepping-stone to full EU membership, rather than as a permanent alternative. Austria had already applied for full membership in summer of 1989, whereas Sweden signalled its intention to apply in October 1990, just four months after negotiations on the EEA had started. Finland applied for full EU membership in March 1992, followed by Switzerland, which entered its application just days after the signing of the EEA agreement in May 1992, and Norway, in November 1992.

Dont be at yourself wrote: »

There's another side to that coin, though. Look at the likes of Switzerland - they get a lot of foreign investment, precisely because they're not a full EU member. As an English-speaking EFTA member with the capacity to ignore a lot of EU legislation and impose our own tax rates and so on, aren't we possibly even more of an attraction?

You're begging a large question there - is Switzerland's high FDI "precisely because they're not a full EU member", or because they operate an unparalleled regime of banking opacity?

Switzerland's 2010 FDI/capita was $65,340, ours was $54,285. Norway's was $26,626, and Iceland's was $38,526. So it seems to me you're picking the best possible FDI, and ascribing it not to any unique features of Switzerland but purely to it not being an EU member - looking at the other EEA/EFTA members, the explanation doesn't hold up.

So, currently we're doing very well in FDI terms inside the EU, and one the basis that one of the EFTA countries with a very different profile to ourselves does slightly better, while others do worse, you believe that we would also do better. I don't see it.

Dont be at yourself wrote: »

Traditionally, some of our strongest political and economical alliances have been with the UK and the US. The former is very euro-sceptic, and I'm not so sure that the US cares so much about us being at the table in Brussels - they just want to use us a staging ground for the European market.

I don't know if it's possible, but to me being a member of EFTA, outside the EU, with stronger ties to the UK and US (and other North Atlantic countries like Norway and Iceland) would be the best of both world.

More likely to be the worst - we too could then apply most EU legislation, pay for market access, and have no say in EU policy-making:

3. Norway’s perception of marginalisation. This frequently heard refrain is objectively justified, but not because of any lack of affection towards Norway in the EU. On the contrary, Norway is seen as being completely in line with the highest standards of economic and social development, civil society and democracy, which are also the standards and values of the EU. Rather, the ‘marginalisation’ is attributable to the declining market share of the EEA in the widening and deepening affairs of the EU, alongside the huge complexities and pressures that weigh upon the EU in its non-stop struggle to maintain political control of the accelerating European integration process. This means that Norwegian ministers and officials visiting Brussels literally spend much of their time in the Council chambers’ waiting room.

cordially,
Scofflaw

Disadvantages to Ireland of EU Membership

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