Wednesday, March 23, 2016
United Irish economy could deliver boost of €36bn
A united Ireland could result in a near €36bn boost to the island’s economy within eight years of unification, according to a study.
Seen as the first major examination of the potential economic effects of an all-island economy, the 'Modeling Irish Unification' report — undertaken by Canadian consultancy KLC and University of British Columbia academics, who have carried out similar reports on German and Korean unification — suggests “significant long-term improvement” in the economies of both the North and the Republic resulting from unification.
Its publication is set against the backdrop of continuing debate around Irish economic growth and the looming ‘Brexit’ referendum.
Report contributor Marcus Noland noted: “Northern Ireland is falling ever further behind the Republic in terms of economic development” and said future relations between North and South “potentially could become more problematic due to the possibility of the UK’s withdrawal from the EU”.
The North would particularly benefit from unification — with its exports initially rising by 5% and long-term GDP per capita increasing by 4%-7.5% — after adopting the euro and the Irish tax system; while the Republic would benefit from barrier-free access to the Northern market.
The North would also see greater openness to foreign direct investment, the authors note, and diminished trade barriers between it and other eurozone members.
It would see improved economic development and salary levels while the Republic would benefit from improved economies of scale for investment.
Lead researcher Kurt Hubner said the study points to “strong positive unification effects”.
“While these effects occur in a static global economic environment, under ideal political conditions, they underline the potential of political and economic unification when it is supported by smart economic policy,” said Dr Hubner.
“GDP in the Republic could rise by €30m to €152m in the year of policy implementation. In total, Irish unification could boost all- island GDP in the first eight years by as much as €35.6bn,” the report concluded.