Section 3: Economic Modelling of Unification

Please see below summary to Section 3 of the report “Economic Modelling of Unification”. Section 3 in full is available at the link

Section 3 Economic Modelling of Unification

Summary

The research paper entitled “Brexit- a view from the Chambers in December 2016” by

the German-Irish Chamber of Industry and Commerce looked at the various analysis

done on the impact of Brexit on Ireland. This paper had a specific overview of the

impact on Northern Ireland and is available in full in the appendix to this section.

The German-Irish Chamber of Industry and Commerce has a unique view on the

impact of BREXIT on Ireland in light of the German reunification experience and view

that “The Irish peace process is lauded internationally as an exemplar to other regions

where there is conflict, however, Brexit could undermine the work of reconciliation and

destabilise the region.”

The German- Irish Chamber of Industry and Commerce also commented that “Brexit

and the challenges it poses cannot be allowed to undermine cross-border cooperation,

economic reconstruction and growing rapprochement after centuries of division on

the island of Ireland. In 1990, Ireland’s European presidency was central to agreeing

a common EU approach to the issue of German unification after the historic divisions

caused by the Cold War. In 2010, on the twentieth anniversary of the landmark Dublin

Summit, Germany’s then foreign minister Guido Westerwelle said that his country

would “never forget” how Irish diplomacy helped fast-track the way for the territory of

then East Germany to join the European Union as part of a unified Germany.A key

question for decision-makers in the EU today is can agreement be reached in a similar

spirit of diplomatic pragmatism to ensure that the unique circumstances of the island of

Ireland”.

It is widely recognised that the effect of BREXIT on the island of Ireland will be

profound and will require ‘diplomatic pragmatism’ by key EU decision makers as

outlined by the German-Irish Chamber of Industry and Commerce. The effect of

BREXIT will also be long term, one of the potential long term solutions would be the

fulfilment of the Constitutional obligation of a reunified Ireland.

The economic analysis of a unified Ireland as an option are few on the ground. There

was economic analysis of a united Ireland based on the economic modelling of

German unification carried out in 2015 entitled ‘Modelling Irish Unification’. This report

is available in full in the appendix to this section. However, it could now be considered

to be out of date due to BREXIT. In the analysis, one of the modelling scenarios in the

report estimates a boost in the all island GDP of 36.5 billion over 8 years with the North

benefitting significantly.

3.1 RECOMMENDATIONS

It would therefore be prudent to commission two reports

One based on a hard brexit with a hard border on a World Trade Organisation tariff

arrangement between Ireland, the EU and Britain and Northern Ireland.

The second report should be commissioned by the Government on the impact of

unification.

The current full Northern Ireland deficit should continue to be paid by HM Treasury

for a period of 30 years after a vote for unification.

 

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