United Ireland would cost taxpayer more than €20bn
‘Living standards would be hit hard’
A UNITED Ireland would cost over €20billion and “result in an immediate major reduction in living standards”, a study claimed yesterday.
The Institute of International and European Affairs said the outcome would be a “dramatic increase in taxation and/or a major reduction in expenditure” in the South.
It comes following recent polls on both sides of the border which showed increasing support for unification.
The IIEA report calculates reunification could cost up to 10% of Ireland’s modified Gross National Income. An IIEA spokesman said: “Figures in 2019 showed the cost of replacing the North’s subvention as €10.91billion.
“If social welfare rates and public sector pay rates were, in addition, aligned it would be €20.625billion.
“Taking as a basis Northern Ireland deficit figures for 2019, unification would add around 5% of modified GNI to the Irish Government’s deficit.
“If rerating of welfare payments and public sector pay rates in the North were included, the cost would be almost 10% of modified GNI. This would add a quarter to public expenditure in Ireland while producing a very limited increase in revenue.”
Since 2015, modified GNI is a measure of national income generally regarded as the most appropriate on national income.
The authors argue the cost of unification could be cut if the North made economic reforms to raise productivity. A spokesman said: “If the North chose to remain in the UK indefinitely, by reforming its economy it would enhance its economic position, realising an improvement in standard of living.
“Reform would reduce its deficit and, therefore, also substantially cut costs linked to unification.
“However, even under the most favourable circumstances, the authors write it is likely to be at least two decades before the productivity gap could be substantially narrowed.”