€35bn boost claims for a united Ireland as Brexit border questions loom

As Brexit looms for Northern Ireland, academics show better future for the north out of Britain 

REUNIFICATION of the north and the Republic of Ireland would deliver an economic boost of over €35bn over an eight year period according to researchers from the US, Germany, Canada and Switzerland. 

The accademic report titled ‘Modeling Irish Unification’ comes amid a war of words over how trade, security and immigration will be handled across the border between Northern Ireland, a part of the UK, and the Republic, after UK exit from the EU.

Led by the University of Vancouver, the report by Dr Kurt Hübener, Dr. Renger Van Nieuwkoop and Professor Steven Raphael shows that unification would be more beneficial for the north in the event of measures such as tax harmonisation and switching to the euro.

“Though the south and north have different underlying economic conditions, there are strong arguments which indicate that the economic potential of the northern economy could be unleashed in the context of greater economic integration with the south of the island.” Marcus Noland

Marcus Noland, executive vice president and director of studies for the Pearson Institute for International Studies and co-author of the report said: “Northern Ireland is falling ever further behind the Republic of Ireland in terms of economic development. This growing divergence is particularly relevant insofar as issues of national identity are becoming ever more fluid in the context of the supranational EU in which both parts of Ireland belong.

“Yet in the medium-term future the relationship between these two parts of Ireland potentially could become more problematic due to the possibility of the United Kingdom’s withdrawal from the EU (the so-called “Brexit”).

“Hence it is an opportune moment to examine the possibility of the two parts of Ireland, not envisioning separate development trajectories, but planning ‘a coming together in order to build on natural island economic strengths and remove barriers and weaknesses so that genuine synergies can be realized for the mutual benefit of both economies’.

“Though the South and north have different underlying economic conditions, there are strong arguments which indicate that the economic potential of the northern economy could be unleashed in the context of greater economic integration with the south of the island.”

Tables showing changes in GDP and Capita in scenario of Republic paying NI deficit after tax harmonisation

Lead researcher for the project Dr Kurt Hübner from the University of British Columbia in Vancouver was invited to Ireland recently as a guest of Sinn Féin, the republican party in favour of reunification.

Originally from Germany, Hübner received his academic qualifications from the University of Berlin and is an expert on European affairs, using his experience of German reunification to build economic models that compare economic and political systems.

Hübner model assumes that NI would adopt the euro and that tax levels harmonised across the island. He states that both of these measures would benefit the north as the euro would make it more competitive for exports. Tax harmonisation, particularly a 12.5 per cent rate of corporation tax, would also make the north more attractive to foreign direct investment which has been a concern for NI exports, agricultural business and light industry.

The total elimination of a border and trade barriers between the two nations would benefit both, the report claims, decreasing transaction costs for trade and growing the income per-capita of both nations.

The report, which is also sponsored by KLC Consulting, has attracted attention as a result of the UK’s vote to leave the EU which has sparked a crisis over how the NI border, the only border the UK shares with the EU, will be administered.

After prime minister Theresa May gave her speech at the Conservative party conference hinting at a so called ‘hard brexit’ and greater controls on freedom of movement for people, there were protestations from across communities on the border and parties in both Irish political establishments.

The Irish government had previously expressed its concern that a hard border between the Republic and the north would jeopardise trade and endanger the peace process laid down by the Good Friday Agreement in 1998.

UK ministers including David Davis have countered, stating that the Common Travel Area (CTA) would still be in effect, being in place between the UK and the Republic since 1923. It is claimed that this would allow a “tailored arrangement” of goods, people and services to flow between the UK and the Republic.

The idea of unification is a major political controversey in Ireland. The partition of the country occured in 1921 following the Irish War of Independence from the UK. It has fundamentally shaped political life on the island for decades, and led to repeated outbreaks of political violence.

The Republic of Ireland Government was not avaliable for comment on the report. 

Picture courtesy of ALC

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