Following Ireland's economic fortunes has been something of a rollercoaster ride over the four decades that we've been part of the European Union. In the years after we became a Member State we changed from being an insignificant, poorly performing economic backwater into a nation of almost full employment and regular budget surpluses.

Now we're experiencing a period of harsh financial difficulty but Ireland in the European Union is well equipped with the tools to take advantage of an improving global economy.

Our small, open economy is heavily reliant on exports and being part of the EU's Single or Internal Market makes it easier to trade our goods and services on both European and international markets.

It also makes us more vulnerable to global events and as we've experienced in recent times, that includes worldwide financial crashes. However, because our economy is so closely integrated with Europe's being part of EU enables us to be confident of recovery.

Most experts agree that Ireland's membership of the European Union greatly facilitated our move from an antiquated, agricultural based economy to a modern one largely driven by hi-tech industry and global exports.

Back in the 1960s, before becoming an EU nation, Ireland had begun to move away from its traditional but outdated economic policy of protectionism, which restrains trade between countries by way of tariffs.

Thanks to measures adopted from a study on economic development compiled in 1958 by officials at the Department of Finance led by one of Ireland's greatest economists, Dr TK Whitaker, the nation was already preparing to move towards a free market economy when we joined the European Economic Community.

Being a part of the developing EEC was seen as a crucial step to creating a modern economy as it would open up new markets for Irish goods and enable us to remove our traditional economic dependence on UK markets.

Agriculture was still Ireland's most important trade sector when we became part of the EEC in 1973 but membership meant it could prosper like never before.

The EEC's Common Agricultural Policy provided farmers with a single price level for selling goods that was fixed at a much higher rate than what was available in the only market open to them at the time –the UK.

But while improvement of the agriculture sector under EEC membership had been expected, its impact on the development of other parts of the economy was less anticipated.

The opening of continental markets to locally made industrial products helped Ireland attract substantial industrial investment in manufacturing while structural funds from Europe were used to improve roads and public transport. There was also money made available from Europe for training schemes which helped upskill the workforce for the new industries.

The economy began to develop and while jobs in older industries were lost, new and better paid work was created through foreign investment in manufacturing sectors like pharmaceuticals, computer related products, metals and machinery.

The new market environment together with decisions to introduce low corporate taxes and develop an Industrial Development Agency (IDA Ireland) to promote Ireland abroad enabled Ireland's new economy to mature.

Ireland became an attractive destination for US owned multi-nationals investors with many choosing to base their European operations here, creating thousands of jobs in the process.

Ireland's new economy is not immune to global factors or poor economic policies and two major oil crises in the 1970s, coupled with what were in retrospect bad budgetary decisions by successive Governments held back growth and led to high unemployment and emigration.

The current worldwide economic crisis is another challenge, but thanks to Ireland's economic transformation during the late 1990s and the early years of the 21st century, the country is in a better position than most to benefit from a global recovery.

Despite having gained independence five decades earlier, Ireland was still economically dependent on Britain by the time the country became an EEC Member State in 1973.

Over half our exported goods went to the UK and our currency remained linked to British sterling.

High inflation in the UK began to threaten price stability in Ireland, making a proposal for a European Monetary System (EMS) that was being discussed between Member States at the time seem very attractive.

The idea was based on a study compiled in 1970 by experts led by Luxembourg's Prime Minister, Pierre Werner. The Werner Report recommended fixed exchange rates between EU Member States and the European Exchange Rate Mechanism (ERM) was finally set up in 1979 after the idea was initially delayed due to international currency unrest caused partially by the global oil crisis of 1973.

After a shaky start, price stability in Ireland was eventually delivered by EMS membership. Inflation fell below five per cent in the mid 1980s and short-term interest rates dropped lower than in the UK for the first time.

In 1989 a new report from an expert committee headed by then President of the European Commission, Jacques Delors, proposed moving to full Economic and Monetary Union (EMU).

EMU began in 1990 but in order for it to be completed a new treaty between Member States was required.

For the second time since joining the European Union, Irish voters were asked to decide on the country's future in Europe. The Treaty of Maastricht had the support of the four main political parties and when the polls closed on June 18 1992, almost 70 per cent had voted in favour of the new agreement.

However, it wasn't all plain sailing towards monetary union. Italy, and –more importantly for Ireland, –Britain were both forced to withdraw their currencies out of the ERM due to their inability to keep within exchange rate limits.

The Irish pound also came under pressure but held, and had stabilised by the time European leaders met in Madrid in December 1995 and confirmed January 1 1999 as the starting date of the final stage of monetary union.

The European Central Bank was established, exchange rates were fixed for good and the Euro became the official currency of 11 Member States including Ireland.

At the beginning it only existed in 'virtual' form but on January 1 2002 Euro banknotes and coins were introduced and the Irish pound was phased out forever.

The Euro has gathered strength as an international currency since its introduction but the global financial crisis has put it under considerable pressure in recent times.

The Eurozone, or Euro Area as it’s now known as, experienced its first official recession in 2008 when the combined economy shrank by 0.2 per cent in two successive quarters of that year.

The European Central Bank responded by cutting interest rates to record lows while an emergency European Council meeting of leaders of Euro Area Member States in Paris on October 12, 2008, resulted in a programme of action to restore liquidity, recapitalise the banking system and protect savers' deposits.

Further measures were taken over the following months and EU leaders are committed to taking whatever action is necessary to protect Europe's currency.

There are now 17 EU countries using the Euro as their official currency, making life easier for both Irish businesses and travellers trading or visiting in the Euro Area.

Ireland's environment has improved considerably since we joined the EEC in 1973 and tough EU rules have meant we've had to act on water pollution, waste disposal, air quality, energy emissions and preservation of natural habitats.

When we first became a Member State untreated raw sewage was being pumped into Dublin Bay and the EU provided cohesion funds to help end this scandal and assist with other large environmental projects such as main drainage schemes in Limerick, Cork, Drogheda and Wexford and the conservation of Irish bogland.

Over the years European Commission directives on the environment have had a significant, positive impact on Irish environmental policy. Irish legislators responded to directives in the 1990s with new laws on waste management and dumping at sea while budgets were put aside for dealing with rubbish and improving water quality.

Implementation of EU standards for waste management and drinking water has been slower than expected in Ireland but as a Member State we’re committed to improvement in the short to medium term.

Other directives have been more quickly acted on in Ireland, including one on recycling electrical waste and electronic equipment implemented in August 2005. The Waste Electrical and Electronic Equipment (WEEE) Directive has been hailed as a phenomenal success, with thousands of items of electrical and electronic waste now going into proper recycling systems.

A similar directive on battery recycling came into force in October 2008 and this is further reducing toxic waste in Ireland.

Ireland's environment has also benefited from funding through LIFE (the EU’s financial instrument for the environment), which was introduced by the European Commission in 1992.

Since its launch around 50 projects focused on environmental innovation and nature conservation have been financed in Ireland. The projects have received a combined total of almost €100 million, of which over €41 million was contributed by the European Union.

In 2010 Ireland’s largest forestry company, Coillte, which was set up by the State in 1998, won an Energy Globe Award for one of its LIFE projects called ‘Restoring Priority Woodland Habitats in Ireland’.

The project revitalised over 550 hectares of priority woodland habitats by removing non-native trees, protecting areas from animal grazing and reinstating natural hydrology to facilitate natural regeneration.

In December 2010 Coillte received approval from the European Commission for another conservation scheme under the EU LIFE+ Programme for the promotion of nature conservation. It will be the largest raised bog restoration project in Ireland focusing on the conservation 630 hectares of raised bog in Ireland.

Irish residents with concerns about the environment can register complaints to the European Commission's Environment Directorate-General and indeed the office gets more complaints from Ireland than larger member states such as the UK and Germany.

Agriculture

The combined agri-food and fisheries sector is Ireland’s most important indigenous industry, contributing gross billions of euros to the Irish economy and employing over 150,000 people.

Ireland is the world’s fourth greatest beef exporter with an annual export value of €1.5 billion. More than 99 per cent of Irish beef exports ends up on high value EU supermarket shelves.

Most of our sheep meat, 98 per cent of total exports, also goes to EU markets while Irish dairy exports amounted to €2 billion in 2009.

The pig sector is also an important component of the Irish agricultural sector with almost half of our pork production exported abroad.

Despite the fact that Irish trade is now more diverse than before we joined the European Union our agri-food sector exports still amounted to an estimated €7 billion in 2009.

Being part of the European Union has helped Irish farmers to remain competitive in an industry that’s undergone huge changes since we became a Member State in 1973.

Back then Ireland’s agriculture industry was almost totally dependent on UK exports where low prices left little room for farmers to make a profit. But EU membership, access to the Single Market and in particular the Common Agricultural Policy (CAP) has brought many benefits to Irish farmers.

Between 1973 and 2009 Irish farmers and our major agri-food companies that buy their produce received nearly €46 billion in CAP funds. In 2009 alone Ireland received €1.9 billion directly from the CAP.

As Ireland's economy has modernised, farm numbers have decreased, but the CAP has taken the edge off this. Without it, the process would have been much more painful.

The original goal of the CAP was to make Europe self-sufficient in food and it’s also helped bring about lower prices for EU consumers, who now spend 13 per cent of their household budget on food compared with 30 per cent in the early 1980s.

Farmers benefited by receiving aid according to how much they produced and agriculture is still the only sector in the EU where each and every business gets a direct payment from Brussels.

Direct farm aid has allowed many Irish family farms to stay in business, but during the 1980s the EU ended up with almost permanent food ‘mountains’ and it became clear that the bigger producers were benefiting from the CAP in a disproportionate way.

The CAP was also blamed for distorting international markets (though the EU was not alone in that) and other European taxpayers wanted better value for their money. The CAP had to change… and it did.

The MacSharry Reform (under Irish Commissioner Ray MacSharry) of 1992 was the first big shake-up. Since then, EU governments have agreed to un-hook financial support from production.

This means that farmers are no longer paid just to produce food. Direct income payments continue but are linked to the farmer's role as guardian of the countryside, and to food safety and animal welfare standards.

Ireland and the rest of the 'old' EU states still benefit disproportionately from CAP funding as just under 20 per cent goes to the 'new' Member States.

The CAP costs about €55 billion a year or 40 per cent of the total EU budget. This is less than 0.5 per cent of GDP in the EU. The CAP is the only policy funded totally from the EU budget. See here for more information about the CAP.

The CAP budget is guaranteed up to 2013 but is undergoing reform. An extensive public debate took place in 2010 during which the overwhelming majority of views expressed concurred that the future CAP should remain a strong common policy.

The reform aims to make the European agriculture sector more dynamic, competitive and effective in responding to the Europe 2020 vision of stimulating sustainable, smart and inclusive growth.

Fishing

In line with the global decline in fish stocks, a reduction of the EU's total catch allowance and the temporary closing of some fishing zones, Irish fleets are - like certain species of wild fish - under pressure and in decline.

However, the clean, unpolluted waters around Ireland’s 7,500km of coastline are rich in aquatic life and form a great environment for seafood.

Exports of Irish Seafood to the year ending November 2009 are estimated at €309 million, representing about 42 per cent of total Irish seafood sales. The main European Irish seafood markets are France, Spain, UK, Germany and Italy and about 75 per cent of Irish seafood exports are sold in EU markets.

Ireland has benefited and continues to benefit from European Fisheries Funding, some of which has been used to support the decommissioning of fishing vessels and for investments in aquaculture.

For the funding period 2007-2013 Ireland is projected to receive EU funding of €42,266,603. This will go towards projects aimed at establishing a viable fisheries sector that respects the environment and towards supporting vulnerable coastal fishing communities.

Every year, government ministers with responsibility for fishing meet at Council of the European Union to negotiate arrangements for managing fish stocks under the Common Fisheries Policy.

These negotiations set the total allowable catches (TACs) and Quotas. The most recent process has delivered fishing opportunities to the Irish catching sector worth €223 million for 2011. The agreement includes whitefish quotas worth some €116 million and the protection of Ireland's €54 million prawn fishery.