As economic “turmoil” and speculative dismantling of the political system in the United Kingdom continues, the Brexit has created three alternative options for citizens of Northern Ireland (1). As Irish Prime Minister, Minister Enda Kenny, suggests, a vote will be held to decide whether or not Northern Ireland should leave the UK to become an independent state, soften the Irish border and become one territory, or remain in the UK and ride out the economic storm caused by the departure from the EU. All three of these results are a possibility, as voters from Northern Ireland were relatively split in their voting on the UK’s EU Referendum--roughly 55.8% were in favor of staying, while 44.2% voted to leave in a vote that saw a 62.7% voter turnout (8). As religious differences and taxation ideologies are dismantled in light of possible economic collapse, the Irish are engaged in “the most serious, difficult issue facing the country for 50 years“ (4).Though the Northern Irish have cast their ballots, the economic implications of that voting outcome have yet to be determined or experienced by Northern Ireland.
With regard to geography, Northern Ireland is the only country in the United Kingdom that is not physically connected to the rest of the sovereign state. Because of its nature as a colonial empire, the UK still maintains its entire territory as non-equal of its sovereignty. Therefore, Ireland must rely on trade and substantial dependency (20%) of the British economy as both a separate and symbiotic relationship (2). In the current market place, the UK plays a much smaller role (originally 50%) in the success of the Irish economy than they did during their entrance into the EU in 1973 (2). Thus, Britain and Ireland play on each others trades, foreign investments, and labor markets in pursuit of economic prosperity. British Interconnectedness Irish exports of goods to the UK account for roughly one-third of their total output, and the separation between Northern Ireland from the UK poses a threat to future trade barriers and limitations (7). Northern Ireland, though physically closer to the UK, does not have the significant trading ports that Ireland possesses (6). With less accessibility to goods at a higher price, a departure from the UK could cause British import volume to decrease by 21.6% (7). With roughly 40% of all agricultural exports from Ireland going to the UK, both Britain and the Irish continue to rely on one another regardless of EU policy (4). In addition, though Ireland has adopted the use of the Euro, the country does £34 billion of trade with the UK alone (4). This would subsequently affect the labor market, as roughly 10% of all workers in Ireland (assumes unemployment) are stationed in these docks or are involved with companies that ship through these ports (3). With decreasing positions and restriction of movement through the border, over 400,000 Irish citizens have found residency in Britain, seeking offshore jobs (7). Finally, increased pressure on earnings among unskilled and skilled positions could arise, as job competition increases in Ireland. It is no surprise, then, that the Irish stock market has plunged, as the UK is the top destination for Irish services and second for its exports (4). Foreign investment only further intertwines the two economies, where both currency valuations and market stability affect industry investments. The pound remains 6% down against the Euro, making it less valuable and possibly less attractive for foreign investment (9). However, because of Ireland’s educational systems and market efficiencies, its economy remains as a vital investment opportunity for the British pound and foreign investors (7). Also, British and Irish economies are further connected through debt, as the EU, IMF, UK, Denmark, and Sweden chipped in €67.5 billion for the Irish bailout in 2010 after the international banking crisis (10). Ireland continues to repay its debt with the “second highest debt burden in the world,” but marginally decreased its debt to GDP ratio by roughly 18.1% per year (11). With debt decreasing and the Euro’s value increasing, Ireland still poses as an investment opportunity for the UK. Reunification (26+6=1) On July 18, 2016, after a Brexit meeting, Irish Prime Minister Enda Kenny stated the Brexit vote was “clear evidence of a majority of people wishing to leave the UK and join the Republic" (12). Four days later, he said, “There will not be a hard border from Dundalk to Derry” (13). A referendum on the reunification of Northern Ireland and Ireland would alter current tax laws, trade systems, and the currency ratios. As an overview, Northern Ireland (now part of United Ireland) would have access to the Irish ports with little to no border controls, thus lowering the price of exports. Assuming stable market conditions, Irish exports would increase, thus GDP would improve. With increased GDP, the Euro would likely make a nominal increase in value against other currencies, assuming stable financial conditions. Following the Northern adoption of the Euro, United Ireland would then gain approximately €35.6 billion over the first eight years (14). Change could begin in the tax system, where the North could adopt the South’s tax rates and regulations on commodities, foreign goods, and institutions. This would likely spur greater foreign direct investment in the North’s economy to stimulate growth (14). A Unified Ireland would assume that currency transaction costs and transport costs would significantly decrease, which would help increase per-capita income (14). The UK would no longer finance Northern Ireland’s fiscal deficit, as the debt would be assumed by the Republic of Ireland (14). Without the need for two separate governments, public sector savings could then be reinvested in infrastructure and government funded projects (14). Independence Though a Northern vote could push them to join the Republic, the people could also vote the opposite and choose to become an independent entity from both the UK and Republic. Because Northern Ireland would forgo UK policy, its political structure, financial allocation, and resource accessibility would undergo transformation. Following the Brexit, the British pound plunged, along with the Gibraltar pound. Even with its independence, Northern Ireland would continue the use of the British Pound, despite the pound falling 8% in value (15). The weaker pound will help increase exports, but the trade reforms from Ireland could increase costs of shipping by limiting the number of products passing through (16). Home to 8.3% of the global market, Ireland is “the most popular destination for offshored business services” (17). With complete independence, Northern Ireland would attract less business entities, and thus less capital. Despite Northern Ireland’s position as a leader in Information Technologies and Software, their global market presence could decrease without access to ports or cheap land. Future implications of Ireland’s economy have yet to be determined as negotiations continue throughout the UK, but there are limitations within the Irish territory that need to be addressed. When considering reunification, the 310-mile border between Northern Ireland and the Republic pose a threat to trade restrictions, tariff controls, and political conflict (4). If the Northern Irish vote for complete independence from both the UK and the Republic, economic, political, and even geographic conditions must be considered. (1) Leahy, Pat. "What Does ‘Brexit Nightmare’ Mean for Ireland?" The Irish Times. 24 June 2016. Web. 24 July 2016. (2) Linnane, Ciarre. "Irish Economy To Be Hurt By Brexit In The Near Term, Says S&P." Fox Business. Fox, 24 June 2016. Web. 28 July 2016. (3) McHugh, Robert. "'BREXIT' COULD CUT IRISH/UK TRADE BY 20%."Business World. NewsAccess, 5 Nov. 2015. Web. 24 July 2016. (4) Doyle, Dara. "Brexit Fallout Affecting Ireland More than Any Other EU Country. "The Independent. Independent Digital News and Media, 18 July 2016. Web. 23 July 2016. (5) "Ireland: Trade Statistics." Global Edge. Michigan State University, 2014. Web. 23 July 2016. "Sea Ports of Ireland IE." SeaRates. SeaRates LP, 2016. Web. 28 July 2016. (6) Tracy, Thom. "How Brexit Would Impact Ireland's Economy." Ivestopidia, LLC, 23 June 2016. Web. 28 July 2016. (7) "EU Referendum Results." BBC News. BBC, n.d. Web. 28 July 2016. (8) "Brexit: David Cameron to Quit after UK Votes to Leave EU." BBC News. BBC, 24 June 2016. Web. 28 July 2016. (9) Barbieri, Rich. "EU Unveils Irish Bailout." CNNMoney. Cable News Network, 2 Dec. 2010. Web. 28 July 2016. (10) Reddan, Fiona. "State’s Debt Ratio Falling at Fastest Rate in the Euro Zone."The Irish Times. 24 Mar. 2016. Web. 28 July 2016. (11) "Border Poll: Enda Kenny 'Brexit Talks Must Consider Possibility'" BBC News. Northern Ireland, 18 July 2016. Web. 28 July 2016. (12) "Brexit: 'No Hard Irish Border', Says Taoiseach Enda Kenny." BBC News. Northern Ireland, 22 July 2016. Web. 28 July 2016. (13) Raphael, Steven. "Modeling Irish Unification." HISTORY OF THE FOUNDATION AND THE RISE OF THE COLLEGIUM TRILINGUE LOVANIENSE 1517-1550: PART THE FIRST : THE FOUNDATION (1951): 659-62. Harvard Club of New York, 17 Nov. 2015. Web. 24 July 2016. (14) "Pound Plunges after Leave Vote." BBC News. BBC, 24 June 2016. Web. 28 July 2016. Campbell, John. "How Will Leave Vote Affect Northern Ireland's Economy?" BBC News. BBC, 24 June 2016. Web. 28 July 2016. (15) Barry, Frank, and Adele Bergin. "Offshoring, Inward Investment, and Export Performance in Ireland." Oxford Handbooks Online (2013). IIS Discussion Paper. Institute for International Integration Studies, Feb. 2012. Web. 24 July 2016. 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