The reunification of Ireland would put staggering financial pressure on the Republic, amounting to around £17 billion a year for 20 years and necessitating a major tax increase, a new study claims.
A report published yesterday by the Irish think tank Institute for International and European Affairs found that Ireland would have to cut public spending and suffer an ‘immediate, major cut’ in living standards if Northern Ireland joined.
The study concluded that the basic administrative costs of reunification, the loss of ‘subsidy’ payments from the UK government and other adjustments would approach a total annual cost of almost €11 billion (£9.5 billion).
But that would skyrocket to around €20.5 billion if Ireland were to bring social benefits, pensions and wages for public services in Northern Ireland into line with those in the Republic.
One of the report’s authors, Professor John FitzGerald of Trinity College Dublin, said: ‘Even though Ireland has a much higher national income, financing the needs of the people of Northern Ireland in a united Ireland would require enormous financial put pressure on the people of Ireland. .’
He added the 20 billion euros per year bill would amount to ‘one third of a bank bailout per year’.
Flowers are seen growing outside the Houses of Parliament, the seat of the Northern Ireland Assembly, in Stormont on January 30, 2024
The report’s second author, Professor Edgar Morgenroth of Dublin City University, said some of the costs would be offset in the long term as a united Ireland would benefit from EU integration.
But he warned it would take “quite some time” for these benefits to materialise, adding: “People bought into the idea of Brexit without knowing what the exact implications would be… difficult to do very precise calculations.
“I think we need to do some planning to understand what the implications might be.”
Professor FitzGerald acknowledged that the cost of reunification would fall significantly if Britain agreed to absorb these costs Northern Ireland’s share of the national debt, but said this was a highly unlikely scenario.
‘Looking for someone else to pay for the unification is not going to happen. If it happens, we have to pay for it ourselves,” Prof. FitzGerald told Irish broadcaster RTE yesterday.
The report has since been fiercely criticized by nationalist politicians in Ireland.
TD Padraig Mac Lochlainn, whose Sinn Fein party has called for votes on a united Ireland by 2030, questioned the validity of the report’s methodology and argued that the economic growth accelerated by reunification would significantly exceed the costs outlined by the professors would compensate.
Stormont Finance Minister Caoimhe Archibald has also made the case for reunification, saying other scientists have shown that unity could lead to a stronger economic future despite the early costs.
“Reunification would best serve Ireland’s economic interests and deliver economic and social benefits for the entire island,” Ms Archibald said.
‘Professor Kurt Huebner, for example, reported that Irish unity could boost the economy of all the islands by €35 billion in eight years.
‘The most important thing now is planning and preparation.’
The report, which has further fueled debate over the prospect of reunification, comes just weeks after Sinn Fein’s president said she expects a vote to take place within six years.
Mary Lou McDonald said she believes the referendum will take place before 2030, following the election of Michelle O’Neill as First Minister of Northern Ireland.
She spoke out on Sky News in February after Democratic Unionist Party leader Sir Jeffrey Donaldson mocked her for saying Irish unity was within “touching distance” and saying she would need “the longest arms on this island” .
“The recent elections in the North of Ireland and the weekend that my colleague Michelle O’Neill became Prime Minister of Sinn Fein in the North for the first time are just indicators of a profound change taking place in Ireland,” she said.
‘When I say unity is within reach, I mean in historical terms – I don’t mean it will happen next week or next month. So you don’t have to have those long arms that Jeffrey refers to. But what I am saying, and what I firmly believe, is that we will have such referendums this decade.”
When asked if she meant 2030, she replied: “Yes, and let me say it’s not that far away, so there’s an awful lot of work to be done.”
Mary Lou McDonald, the nationalists’ president, said she believes the referendum on reunification would take place before 2030, following the election of Michelle O’Neill as first minister in Northern Ireland.
McDonald’s comments came after Democratic Unionist Party leader Sir Jeffrey Donaldson mocked her for saying Irish unity was within “touching distance” and saying she would need “the longest arms on this island”.
McDonald also put pressure on Labor leader Sir Keir Starmer in February to go ahead with a border election if he becomes Prime Minister later this year.
Such a poll is at the discretion of the government, but there are criteria within the Good Friday Agreement (GFA) that say that someone should be called ‘if at any time it seems likely to him that a majority of voters would express the wish that North -Ireland must stop being part of the United Kingdom and become part of a united Ireland.’
Successive British governments have consistently refused to publicly specify what criteria will be applied when measuring public sentiment on this issue.
McDonald said: I hope that Keir Starmer and a Labor government, given that the GFA was primarily a Labor Party achievement under Tony Blair, I hope that he will be very loyal to the GFA in word and spirit. ‘
Under the terms of the Good Friday Agreement, the incumbent minister of Northern Ireland would have to call a border poll if he/she believes there is evidence that public opinion in the region has shifted in favor of constitutional change.
But Sir Jeffrey Donaldson rejected suggestions of a poll within the next decade, insisting that ‘we are nowhere near a united Ireland’.