Both Republic and North ‘could benefit from united Ireland’

Despite the concept of a united Ireland being at the core of Irish political debate since partition in 1921, it is astonishing how little in-depth study has been done exploring what it would be like.

How would the administration work? Would it involve any major societal changes? Would it be an economic success or basket case?

A team of academics from Canada, Switzerland and the US have now tackled the economics question, and have modelled how a 32-county Ireland might fare economically.

Their conclusions? Surprisingly good.

Reunification could deliver a boon to the enlarged island state worth over €35 billion in eight years.

And the North would benefit enormously, with more modest gains for the South.

Dr Kurt Hübner from the University of British Colombia in Vancouver led the project, entitled Modelling Irish Unification, and has been in Ireland over the past week as a guest of Sinn Féin, and has spoken at a number of events.

Expert

Dr Hübner, originally from Germany, received his academic qualifications from the University of Berlin and is an expert on European affairs.

With brown curly hair and a natural affability, he outlines the basis of the research that concluded that a united Ireland would be a winner on the economic sphere.

The study required modelling to foresee how the dual economics might combine and that work was done by Renger van Nieuwkoon from Switzerland.

Hübner and his colleagues were able to avail of their familiarity with similar work that had been done in Germany after reunification.

“We gathered data from the North and from the Republic,” he said.

“The systems were very different and a lot of data was not available for Northern Ireland as an independent entity. Its data was included in that of the UK.”

In some instances, he said, the data for the North was relatively easy to subtract, although in some other cases they had to make assumptions and speculate. The report has said all of those assumptions remain “within the realm of reason”.

The report chose a base year, 2009, for the comparison.

When it is put to him that it might not be the best year given it came at the end of the Celtic Tiger, Dr Hübner replied there was evidence to show the recession was well established in 2008, its effects were apparent in 2009 and it was a more representative year that might be though at first glance.

He outlined the different assumptions the authors made. Not all of those might conceivably happen in the real world, where the reality of politics might make some changes impossible to bring about.

In the first instance, it is assumed that both jurisdictions would adopt the euro. Secondly, there would be tax harmonisations across the islands.

Tax harmonisation

Both 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.

As it has transpired, moves to lower corporation tax in the North are already in train since the research was conducted.

The complete elimination of a Border and trade barriers would benefit them both.

The decrease in transaction costs would lead to an increase in per-capita income.

There is also a discernible productivity gap between both jurisdictions at present, based on two different types of economies.

An increase in productivity in the North would benefit both economies, said the report.