By Ambrose Evans-Pritchard

For 700 years Ireland was Britain’s outer defence – nolens volens – against the great powers of continental Europe.

By a twist of fate, the Irish must now cast the ballot on the EU constitution for both islands, since Labour has defaulted on its pledge for a British referendum.

Our shared Anglo-Celtic culture has long been a well-spring of free enterprise (with Dutch, Swedish, and Hanseatic help in fighting European absolutism along the way), and that is what is so threatened by the Lisbon Treaty, the treaty to end all EU treaties.

The text strikes the words “free and undistorted competition” from the core objectives of the Union. Corporatist aims will enjoy a higher legal status at the European Court (ECJ) and must prevail if the two clash. The Rhineland Model has locked in a permanent advantage. 

Euro-creep is already eviscerating the Common Law that underpins the British and Irish way of doing business. Lisbon quickens the pace. It upgrades the ECJ to a de facto supreme court, with broader jurisdiction. It will have the last say on a raft of new economic and social rights. Who can stop them imposing a Colbertist agenda by court rulings, if they so choose? The ECJ is beyond appeal.

Euro-judges will decide how and when to enforce the Charter of Fundamental Rights, now made legally-binding. Article 52 allows the “limitation” of all liberties in the “general interest” of the Union. This is the old Reich clause. Such justifications for state coercion have been illegal in Europe for 60 years. Now they return, by the back door.

Ireland is the only state to hold a vote. Lisbon gives Europe the paraphernalia of a proto-state: a full-time EU president and foreign minister; a justice department; an energy department; “legal personality” so it can negotiate treaties; etc, etc.

The other 26 EU members have ducked a referendum, their leaders hiding behind each other in an anti-democratic pact. Some 3m Irish voters carry the lonely burden.

They have been through this before, shocking themselves with a No to Nice in 2001. This time stakes are higher. The Celtic Tiger is flagging.

Brussels is turning hostile to Ireland’s buccaneering capitalism, and its 12.5pc “fiscal dumping” taxes. Paris let slip that France’s incoming EU presidency would push for “harmonised” business taxes. “Untimely,” muttered Dublin.

The Anglo-Celts are the targets of last week’s open letter by a roster of EU statesmen calling for a new “European Crisis Committee” to take the markets in hand.

“The financial world has accumulated a massive amount of fictitious capital, with very little improvement for humanity. The financial market is not capable of self-regulation,” they thundered.

Who can stop the regulatory squeeze in Europe once Ireland’s free marketeer, Charlie McCreevy, is unseated as EU single market commissioner next year?

Ireland deserves great praise. The Tiger has achieved miracles. But that will not prevent the swing from boom to bust as monetary union works its perverse effects.

Waterford Crystal is battling for its life. It is facing currency asphyxiation. Almost 70pc of sales go to the dollar zone. As such it is a metaphor for all Ireland. The country is more deeply intertwined with the dollar and sterling zones than any other euro-zone state. The crash of those two currencies could not have come at a worse moment. Welcome to EMU’s first “asymmetric shock”.

EMU monetary policy was too loose early in the decade. Now it is tightening at the wrong time. House prices have fallen 8.9pc over the last year. Mortgage rates have been rising into the slump. Three-month Euribor is at 4.86pc, up 65 basis points since August.

Ireland’s central bank cannot come to the rescue. Rates are set in Frankfurt for the needs of core-Europe. The Bundesbank is even lobbying for rates to go higher. This is starting to feel like the ERM crisis in 1992 but without the escape valve.

By the time this EMU denouement plays out, Ireland will have voted. Lisbon will probably be law. The euro-elites will have prevailed. But history will not be kind to the venture.

It is one thing to nudge the European Project forward by stealth – the “Monnet Method” of fait accompli. It is another to impose a treaty that has already been rejected by people in a direct vote, as the French and Dutch did by emphatic margins in 2005.

How on earth did we arrive at such a sorry state of affairs?

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