Current Affairs Economics Politics

David McWilliams: There Is Little Doubt That The Republic’s Economy Could Absorb The North

In relation to the inadvertent political consequences of the United Kingdom leaving the European Union, the Irish economist and author David McWilliams makes this interesting point in the Financial Times on the viability of a possible post-Brexit reunited Ireland:

[For the north of Ireland] The UK’s annual subvention is just over €10bn annually. When seen from the perspective of the North, with its total GDP of under €50bn, it looks like a significant figure — but when seen from the perspective of Dublin, it is not insurmountable. The usual way financial markets assess whether national expenditure and debts are sustainable is the debt/GDP ratio. Northern Ireland would cost less than 4 per cent of the Irish Republic’s GDP annually. Of course, even this manageable figure would end up lower because the combined Irish GDP of the Republic combined with the North would be well over €300 billion, reducing the subvention as a percentage of income yet more. In pure budgetary terms, there is little doubt that the Republic’s economy could absorb the North and this is before the commercial dynamism of unification kicks in.

And the above doesn’t even factor in the strong likelihood of continued financial contributions from the UK, as well as the EU and perhaps US, towards a post-unity Six Counties.

Advertisements

14 comments on “David McWilliams: There Is Little Doubt That The Republic’s Economy Could Absorb The North

  1. The size of the subvention is debatable; others say it’s about £5bn, which makes (re)unification financially easier. It seems to largely depend on GB/England specific items, such as defence and perhaps nuclear power, and how these are accounted for.

  2. Need to make up for loss of NHS which would cost a mint

    • It’s also possible, that people who grew up with the NHS (as did their parents and grandparents) might find it “an adjustment” to have to navigate the Irish Health System after having known only the NHS.

      The NHS allows all citizens to seek care at hospitals or clinics without paying, and even prescriptions can be picked up at NHS pharmacies.

      Which is not to suggest that the NHS is necessarily better than the Irish system. But my impression is that the Irish health system is moderately byzantine. (Not that my own country is in any position to throw stones on having a Byzantine health system.). And that can be a tough scary adjustment for people who’ve been raised on socialized medicine. I’ve seen legions of otherwise smart, savvy, bold, adventurous, and amazingly resourceful people I admired -true survivors some of them-reduced to tears, distress and abject panic over it

      Now of course, it could be worse. At least in The Irish Republic, healthcare is seen as a basic right. I’ve lived without health insurance with a chronic condition and with no way to treatment- It’s no fun at all!! Also the Irish Republic is said to provide a higher quality of medical care overall than the UK.

      But I do not see an easy adjustment. The reunification of Germany was very much wanted by most German people and has largely been for the best (despite some fears at the time!!!). But it was not a smooth ride for……well it still presents challenges.

      • ‘moderately byzantine’ is a very nice way of putting it. It’s a mess. However it is an interesting hybrid of socialised and part privatised and I don’t think it impossible that it could (and this is government policy) shift closer to an NHS style. Agreed though, any such change, and all changes re unification / reunification will be a challenge. Not insurmountable but difficult in some parts. Sorry to hear that re your situation. I’ve friends in the US in a similar position.

        • Well if you want to talk Byzantine….my current job puts me in contact with Medicare Part D on a daily basis. (Re My experience. Obamacare actually got me out of a situation I wouldn’t wish on my worst enemy.)

          Interesting what you say. There was a time when I was one of very few Americans who wanted healthcare reform to go in an NHS direction. These days, I’d rather look at least partly to Germany’s model to expand and improve what we have now. 90% of US liberals and progressives look to Canada. Do many Irish people (Republic) want an NHS style system?

          I’m also wondering about the school system with any transition. What of the expectation to study Irish for students towards the middle or end of their school years? Or other curricula differences? Or if children from OO families are now expected to study Irish? Or if most teachers in Northern Ireland were taught to do things the British way and now have to change? The UK actually has a very strange education system from my POV.

          I could easily see there being strong shades of East Germany, because of the years of anti-Catholic discrimination in The North.

          • I think there is a support for some sort of free at point of use system. Re the US I can see the logic of going the German model or Canada. That’s a great point re education and transition. I sometimes think that the compromises nationalism/republicanism would have to make to accommodate a million folk with a somewhat different cultural and societal direction are underestimated. Your point re Irish is spot on. I speak it a bit in work but the idea of forcing people to speak it in the North against their will doesn’t sit well with me. ASF’s point about a reverse GFA/BA makes a lot of sense, transfer sovereignty to Ireland as a whole but retain elements of the GFA/BA across a transitional decade or two, integrate what can be, allow for some distinction in some areas and accept that there will be differences that will persist (for example in the school system in the ROI as with catholic and protestant schools – that oddly doesn’t sit well with me either, I’m actually strongly in favour of universal state school systems).

            • It’s a tricky one isn’t it? As far as I can see there are three options with regards to the Irish language in the North if reunification happens. 1) The requirement to study it in school gets relaxed at least in Ulster. 2) Some element of school segregation. 3) At least some Ulster Protestant kids will have to study Irish.

              The idea of forcing people to speak a language: That’s a question where it can be hard to know where to draw the line. Of course, nobody’s suggesting cruel and unusual punishments to Protestant kids for speaking English, right? But at what level of revival would it take before not learning that language becomes a disadvantage? Even if school segregation proves acceptable and produces not inequity between the two groups?

              I imagine the question will be a hairy one for many, many years.

              Where I live I have absolutely zero sympathy or patience for the people who complain that they or their children are being “forced” to learn Spanish. We actually have a treaty with Mexico that stipulates that in a major portion of the US Spanish must be given equal status (and I live in that area). I actually am bilingual in Spanish myself and speak Russian as well. One big non-equivalence however, could be the fact that Spanish is a top global language.

              Re Free POS healthcare. I could still see introducing some non-means tested elements of that in the US with regards to some of the hospitals and UCs. However, I’ve come to believe that there are massive advantages to having a strong Bismark element to a nation’s health system. Also wouldn’t want to do away with the better or historical non-profit hospitals nor make them only available to those who can pay.

  3. I have no doubt that ” there is little doubt that the Republic’s economy could absorb the North and this is before the commercial dynamism of unification kicks in”.

    The issue is whether the republic is willing to welcome in northern republicans and nationalists.
    Over the past 100 years the Republic of Ireland’s governments have, with difficulties and sacrifices, built up the country we see today.

    ROI Governments have given little or no sign they are interested in undertaking the project of integrating
    Northern Nationalists/Republicans, who had/have nothing else to pin their hopes on.
    Besides the hope of becoming part of the Republic of Ireland, they have never had any other alternative other than knuckling under to the Orange State, the DUP and so forth.

    NB: ROI governments have always come down very hard on any republicans who suggested re-unification,
    For the series – out of sight, out of mind.

    Once ROI governments are ready to pay more than lip-service to supporting Northern nationalists/republicans, a re-Unification project may get under way.

    As far as regards the Northern Unionists/Loyalists – they can be contained – Civic education programmes can be set up. Sweetners can be offered, Re-location deals can be done if naught else will suffice.

    Up to you Fine gael, Fianna fail and co! decisions! decisions! choices! choices!

    • Afraid of dealing with the Loyalist Paramilitaries? I think they have a cosy setup as is and they are not arsed to face to hard reality of unification

    • Containment and civic education programmes : that sounds like a really attractive prospect for erstwhile Unionists who may be contemplating a U.I. in the wake of Brexit. I presume this “civic education” would be along the same lines as the Uyghurs are currently experiencing in China. I’m being facetious, but really how patrionising can you get?

  4. Ben’s right about the ROI political establishment of course, politics being mostly about doing what’s seen as necessary in the least risky manner. And the observations on losing the NHS definitely have merit. But we’re possibly moving to a highly fluid (and thus potentially hazardous) situation on these islands for at least the next few years. For the first time in centuries, the UK has not had the final say on what happens on the island of Ireland. We shouldn’t underestimate the psychological shock of this for a London establishment that, right throughout this process, has badly miscalculated its leverage and strength relative to that of its negotiating partners. We face the prospect of a Britain not just socially divided, but descending into civil strife and conflict, and of a centuries old political dispensation reaching its breaking point. People across our neighboring island will be scared and angry and the six counties will not have a monopoly on violent reaction. If this happens, Dublin just might not see any other choice but to move towards unification to prevent destabilization of the entire island of Ireland. Not because they believe it’s best, but because it might be the least worst of a range of some very unpleasant scenarios. I think they’ll also have their work cut out preventing a ‘Irish stab in the back’ legend taking hold across the Irish Sea. Even a weaker, poorer, shorn-of-Scotland England will remain the most populous and powerful state on these islands and we don’t need that kind of animosity. But putting all talk of unification aside, here’s what I think is the most important thing to remember in the times ahead: a lot of ordinary people, families and communities on both islands are going to suffer hardship. Let’s focus on being kind, decent, generous and on doing everything in our collective power to ensure demagogues and hate mongers of every stripe and color are denied the chance to cause more mayhem.

    • Are you saying that you think England could fall into some………2nd English Civil war?

      By an “Irish Stab in the back” legend, do you mean The Brits having some “back-stab legend” that blames Ireland for their problems, or that Ireland might acquire a “Dolchstosslegende” of some kind? (You definitely don’t want one!!!!)

      • Express and Daily Mail are again running stories that Enda Kenny was “working ” with the UK in delivering a “deal” and that Leo Varadkar has sabotaged this, Ian Duncan Smith was on Sky news spouting this fable as well recently.

  5. My theory is that the Brits have intentionally caused the Brexit situation to, at least in part, get rid of NI.
    The coalition with the DUP has shone a great light on them, and so exposed them for what they really are to the world. Now it appears that the Brits are stabbing them in the back (surprise surprise).
    I feel confident that Ireland will be united at some point in the foreseeable future and that Brexit will have been instrumental in this, even if it Brexit doesn’t happen!
    However, it may take another decade or more due to the generational differences between the current electorate and the forthcoming “millennial” more liberal demographic to become an strong part of the electorate.

    We have to realise that the Brits are great at playing games, both mind games and material ones.
    They wrote the book on it.
    We also need to think about how they are great are feigning incompetence, a classic “magicians trick” as it were.
    Remember that the UK joined the EU (or EEC as it was then) without a referendum – what makes us think they want the opinion of the electorate if they want to leave?

    There are no actual democracies in the West, just feudal systems very cleverly designed to keep the serfs in check.

Leave A Comment (Please familiarise yourself with the ASF Terms of Use and Commenting Policy before posting a comment)

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: