The Bell Tower dominates the skyline of the beautiful town of Bruges. It featured in a scene in ‘In Bruges’ when unlikely hero Brendan Gleeson fell to his death. In 1988 I spent a year there, studying at the College of Europe. I have vivid memories of the Bell Tower: being woken up at ungodly hours of the morning by its incessant chimes; feasting on that great Belgian delicacy of mayonnaise and chips flogged from the van under the tower; and Mrs Thatcher’s Bruges speech in the hall underneath the tower.

I arrived in Bruges in mid-September to join about 200 students from all over Europe doing a post grad. The College of Europe is to the European Union what West Point is to the American military. Its job is to train the next officer class of the European Commission, European Parliament, ECB or Court of Justice.

The majority of the students who graduated with me have gone on to work deep in the European project – most of them remaining true believers. Quite what happened to me when I was there is anyone’s guess, but back in 1988, I too, if not exactly a believer, was at least happy to go along with the script.

Belief is why Mrs Thatcher’s speech in Bruges was so incendiary. Her speech was an example of a clash of beliefs and clash of convictions. Lined up in the hall were a few hundred of the great and good of the European project, convinced that federalism was the way forward for the countries of Europe. Opposing them was Mrs Thatcher, who believed national sovereignty should not be eroded.

Interestingly, it was the issue of sovereignty and the nation state rather than economics or philosophy that sparked our small protest. Now what happened was hardly Paris 1968 or the Kent State riots and it seemed to us totally natural.

When she walked into the room, everyone stood up to clap. All around us, people were on their feet. But the eight Irish students – we were sitting together – remained sitting. It wasn’t planned, rather it was instinctive. In 1988, we simply could not stand up and clap Margaret Thatcher.

For a bourgeois institution like the College of Europe, this small protest sparked a mini-incident. In typical conventional fashion, the boss of the college seemed to be more worried about offence caused and “what might the neighbours think” rather than the prospect of an Irish republican cell operating in the medieval cobbled streets of Bruges.

We were far from republicans but Mrs Thatcher seemed to embody all that was wrong in the world and all that was dysfunctional about our relationship with Britain, and maybe we didn’t realise it at the time, but a dislike of her was a factor in the Irish establishment’s unquestioning eurozealotry, which persists today.

This was the decade of the hunger strikes, the Falklands War, the miners’ strike, the Specials, Elvis Costello, the Cold War and, of course, on the other hand, the emergence of the “loads of money” culture in Britain and, with it, English nationalism under the flag of the Conservative Party. All these things framed our world view.

Now, with the benefit of hindsight, is it possible to assess Mrs Thatcher’s legacy objectively?

Much will be written on politics, so let’s stick to the economics.

It may seem strange to describe the arch enemy of trade unionism as the mother of the Croke Park Agreement. By this I mean that Croke Park is the descendent of the original social partnership hatched in the late 1980s and early 1990s.

Having been shocked by what happened in Britain to the unions, maybe a generation of Irish union leaders tactically concluded that it would be better to get involved with the State rather than confront it.

As long as the economy is growing, the idea of divvying up the growing pie through negotiation is a win/win approach. But when the economy is stuck as it is, it is clear that for one sector to win, another has to lose. No growth rather than too much ideology is the biggest threat to Ireland’s social partnership model. As a result, a Thatcher-style government versus trade union showdown can’t be ruled out here. In fact, in certain areas, it’s necessary. The difference will be a matter of execution rather than outcome.

On the issue of economic management, supporters of austerity point to Mrs Thatcher’s spending cuts in the teeth of recession. They point out that the British economy took off thereafter and suggest the same could happen here. But this is not the case.

What they forget is that the British fiscal contraction of the 1980s was accompanied by the greatest monetary expansion the country has ever seen. Interest rates fell rapidly, deregulated banks pumped the economy full of credit, house price inflation led to massive wealth effects and the consumer boom dragged the UK out of recession. At the same time, sterling weakened from the mid-1980s on, underpinning what was left of British manufacturing exports.

We are trying to have fiscal contraction without domestic monetary stimulus or a weakening exchange rate; there are few lessons for us from the UK of the 1980s.

While a clash between Mrs Thatcher and the unions was inevitable and there was a need to loosen up the economy, today, in the wake of the global financial crisis, it is obvious that the pendulum has swung too far.

Banks and the financial markets are dangerously out of kilter, while companies driven by the Thatcherite doctrine of “shareholder value” can’t just set up shop wherever they want without paying taxes in the country they generate their profits. The Starbucks example in the UK recently is instructive.

Equally, the conflict between the country and the corporation needs to be re-configured. For example, in the US today, corporates are sitting on more cash than ever before, their treasuries are being subsidised by cheap money from the central bank, yet they are not investing or employing, while agitating for more tax cuts.

This can’t last because what is good for the individual company is bad for the collective economy. And all the while, the very rich are getting richer and the middle classes poorer.

Mrs Thatcher’s legacy will be debated. On Europe, she was right. She claimed the objective was federalism and she was spot on. What this means, as she outlined in Bruges that day, is nothing less than an end of the nation state in Europe.

When this becomes apparent to the peoples of Europe, expect a political battle that will put the miners’ strike and the Falklands War into the halfpenny place.

 

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