Ireland and the Single Market
The European Single Market Programme
The introduction of the Single European Act (SEA) in 1987 gave a major boost to the Irish economy at a time when any help was appreciated, no matter where it came from. Its economy was, by 1987, on the brink of economic disaster. Ireland 's only hope was to enhance its international attraction as a low cost manufacturing base, thereby inviting foreign investment and boosting local employment. Any efforts by the EU to create a viable single market by eradicating bureaucratic obstacles (Non-Tariff Barriers) and state aid, financial assistance from a national government to a domestic industry or company, would place Ireland as a identifiable base for large manufacturers exporting to the European Union.
This initiative by Jacques Delors, the President of the Commission at the time, was regarded as the most important factor in the recovery and rehabilitation of the Irish economy. The further promise of deeper integration attracted the attention of higher levels of foreign investment from such countries as Japan and United States of America.
In turn, the SEA also forced a change in Irish business strategy. It was easier for Irish exporters to expand abroad. New common technological standards and the guarantee of protection by strengthened EU legislation provided for a more reliable single market. One other benefit was the forced increase in productivity and efficiency of both domestic Irish firms exporters. The challenge of competing with European industry also refined corporate Ireland ‘commercial prowess'.
With opportunities also came challenges. For years the Irish economy was completely reliant upon its closest neighbour, the United Kingdom. The creation of a more integrated market meant a new trading scenario, where our dependence upon Britain would irreparably change. This exposure to outside competition would have an immediate impact on certain Irish industries. How could this economic change and social transformation be managed?
A Changing Irish Economy
In every member states certain industrial sectors were dominated by state owned industries.
From 1993, explicit state aids were outlawed. This also added the incentive for greater private sector investment, hence creating more jobs. In Ireland 's case, state aid to companies such as Irish Steel, Aer Lingus and Telecom Eireann was outlawed. Although initially politically sensitive, this form of deregulation proved incredibly beneficial for the Irish consumers. New competitors were created overnight, thereby reducing prices for consumers. Indigenous Irish companies such as Ryanair and Esat Telecom could not have been as successful without the creation of more integrated single market.
The introduction of free movement of capital has proved a major boost for the Irish financial services market. Together with the Irish Financial Services Centre (IFSC), international financial institutions have established themselves in Ireland , creating thousands of jobs in the process. Irish citizens can also invest in a broader range of equities, bonds and differing investment funds both inside and outside Europe. This greater choice has forced companies to deliver greater returns to their shareholders thereby ensuring a very competitive market.
In summary, the Single European Act has disproportionately benefited the smaller nations of the Union. By the creation of common standards and total protection under EU legislation, all countries can now compete on a ‘level playing pitch'. These factors eliminate the greater political and economic might of the larger EU member states, thereby ensuring fairer competition. This advantage has and continues to be positively exploited by Ireland.