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In the general election of 1948, Fianna Fáil failed to gain a majority, winning only 68 of the 147 seats in the Dáil, but de Valera refused to enter a coalition. John A. Costello emerged as the leader of an interparty government led by his own party, Fine Gael. Costello introduced the Republic of Ireland Act, which repealed the External Relations Act of 1936 and ended the fiction of Commonwealth membership. The act took effect in April 1949, and the British government retaliated with legislation recognizing the new status of Ireland but guaranteeing the constitutional status of Northern Ireland and the territorial integrity of Northern Ireland as subject to the consent of the parliament of Northern Ireland. Although partition remained a festering sore that erupted 20 years later, the Republic of Ireland Act dissolved the obsession with the British connection. Henceforth relations between Dublin and London were conducted on the basis of absolute equality between sovereign governments, and domestic politics, as elsewhere in western Europe, increasingly became the politics of economics.
The 1950s were a time of economic stagnation (with emigration running at levels unprecedented since the 1880s) and of political flux. There were changes of government after the elections of 1951, 1954, and 1957, when Fianna Fáil returned to power for what proved to be another 16 years. In 1959 a blind and aging de Valera was elected president, and he remained in that office until 1973. His successor as taoiseach (1959–66) was Seán Lemass—minister for industry and commerce (1932–39, 1941–48, 1951–54, and 1957–59) as well as minister for supplies during World War II—whose predominant interest had always been economics.
Robert Walter Dudley Edwards John O'Beirne Ranelagh Ronan FanningDevelopments since 1959
Economic and political developments
Integration in Europe
Economic Development, a plan for national regeneration, had been published in 1958 under the name of T.K. Whitaker, an exceptional civil servant and then secretary of the Department of Finance. Lemass and Whitaker implemented the First Programme for Economic Expansion (1958–63), under which the principle of protection was abandoned and foreign investment encouraged, while a targeted growth rate of 2 percent resulted in 4 percent actual growth. This prosperity brought profound social and cultural changes to what had been one of the poorest countries in Europe. Emigration substantially declined; access to education broadened; consumer spending increased, and holidaying abroad became commonplace; Catholic social teaching was challenged; and the advent of an Irish television service eroded traditional values and led to a relaxation of censorship of books and films.
In 1961 Ireland applied for membership of the European Economic Community (EEC; later the European Community [EC], embedded in the European Union [EU]). The application lapsed when the French vetoed Britain’s entry; the predominance of the British market for Irish producers was such that it made no sense for Ireland to join the EEC if Britain was excluded. Nevertheless, Lemass’s unequivocal commitment to Europe (for which he won the support of the main opposition party, Fine Gael) proved his enduring legacy. The Anglo-Irish Free Trade Area Agreement of 1965 dismantled more tariff barriers, and although Ireland, like Britain, did not join the EEC until January 1, 1973, the delay eased the impact of transition.
Engagement in Europe transformed Ireland socially as well as economically. Production subsidies and higher prices under the EEC’s Common Agricultural Policy (CAP) benefitted Irish farmers; Irish industry gained from access to wider markets; and European social and regional programs revolutionized the country’s infrastructure. Reduced dependence on British markets led in 1979 to Ireland’s joining the European Monetary System despite Britain’s staying outside it; this severance of the more than 150-year link with sterling was affirmed in 2002 when Ireland, unlike Britain, joined the euro zone (the countries that share the euro as their currency). In May 1987 a constitutional referendum ratified the Single European Act and confirmed Ireland’s participation in the EEC. The act called for the harmonization of social and fiscal measures taken within the EEC and was a forerunner of the 1991 Maastricht Treaty (Treaty on European Union), which paved the way for the establishment of economic and monetary union and was approved by a large majority of Irish voters in a referendum. Ireland became an unexpected obstacle to further European integration, however, when the Lisbon Treaty—an agreement aimed at streamlining the EU’s processes and giving it a higher international profile—was rejected in a referendum in June 2008; that verdict, however, was reversed in a second referendum on October 2, 2009.