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.
