A US-Canadian study says that Britain’s decision to leave the European Union will cost both Northern Ireland and the Republic billions of euros and the only possible successful outcome is reunification.
Northern Ireland has become something of a political football stuck in the middle of a seemingly intractable disagreement between the British Government and the EU negotiators. Both agree that there can be no return to a hard border between the North and the Republic, but they can’t agree on how to achieve that while maintaining necessary customs checks once two different trading regimes come into effect.
A report produced by the Canadian firm KLC Consultants on behalf of the US-based Irish American organisation KRB Inc has produced some startling findings. The study, The Costs of Non-Unification – Brexit and the Unification of Ireland, examines three possible scenarios:
Hard Brexit. This is where all the UK including Northern Ireland leaves the single market and the Customs Union, the two key pillars of EU trade
Compromise Brexit, in which Northern Ireland remains within the single market and customs union.
Unification of Ireland following the political fall-out of Brexit, which a majority of people in Northern Ireland voted against.
The researchers estimate that hard Brexit would reduce the North’s GDP by more than €10 billion between 2021 and 2025, while remaining in the Customs Union and Single Market would lead to a loss of €3.8 billion over the same period. However, reunification with the Republic could lead to an increase in GDP.
The report says: “The only winning scenario is the case of unification where between 2018 and 2025, Northern Ireland would increase its GDP by €17.9bn.
“If political actors nevertheless prefer a hard Brexit, or if they are willing to accept a hard Brexit for overarching political reasons, then they accept willingly high negative economic costs.”
Sinn Fein vice president Michell O’Neill told the Press Association: “This report, and particular economic modelling, exposes the hard economic evidence that reunification would provide a massive economic boost to the entire island.
“In the words of the report, unification ‘is the only option with positive net effects’.
“The strength of this evidence cannot be ignored and while we thank Dr Hubner and his team for this valuable contribution, it is a debate that the Irish Government must now take a much more proactive role in leading.
“A new generation is already questioning partition, particularly in the context of Brexit, and it is time now for the Irish Government to encourage and lead an informed, reasoned and respectful public dialogue on the issue of Irish unity.
“It is also time that the Government prepared a realistic plan for Irish reunification, including the establishment of an Oireachtas committee to bring forward a Green Paper for Irish reunification.”
However, Ulster Unionist Steve Aiken dismissed the findings, saying that projected loss of €10 billion was a small figure over the projected time frame and well within the margin for error.
He told the Press Association: “I can only presume when they continue to put data into the model, they will suddenly realise something we have known all along – that unification is not an answer and would be a net detriment to Northern Ireland.
“And that is very clear because there is no way we can go from one of the largest economies in the world with close on a three trillion GDP into joining something like the Irish Republic that will have significant problems going forward, particularly if the Irish Government continue pushing us towards making sure we have a hard Brexit rather than having an appropriate Brexit for everybody.”
Britain is due to leave the EU next March but still hasn’t reached a withdrawal agreement, with the Northern Ireland border remaining the main sticking point. Even when a withdrawal agreement is reached, there will still need to be ongoing negotiations over the next two years and beyond to settle on a trading and customs arrangement between the two sides.