United Ireland could cost up to €20 billion a year, study estimates

The study also said that these costs would result in 'an immediate major reduction' in 'living standards'.

It also said that unification would require a rise in taxation of about 25%, as well as a significant reduction in expenditure.

The report about the increasingly discussed topic is titled Northern Ireland Subvention: Possible Unification Effects and comes from The Institute of International & European Affairs.

Its co-author Professor John Fitzgerald appeared on RTÉ's Morning Ireland on Thursday (4 April) and was asked how he arrived at the figure.

A new paper 'Northern Ireland Subvention: Possible Unification Effects' authored by Co-Chair of the @IIEA Economists Group, John Fitzgerald and Member of the Economists Group Professor @MorgenrothEdgar has been published. Read the full paper here: https://t.co/C3SimRAVcn pic.twitter.com/ndlvAQgxUq

— IIEA (@iiea) April 4, 2024

He explained: "In 2019, the central government in London had to transfer €11 billion to Northern Ireland to pay for health, education and so on. So, there's a gap between the revenue in Northern Ireland and the expenditure.

"The gap would be some what smaller in the case of unification because the British army costs a lot but it would just knock about a billion off the cost.

"So, you're down to €10 billion. Also welfare payments and public sector pay rates are dramatically lower in Northern Ireland than the Republic.

"You couldn't really have unification and have the poor cousins up north paid 2/3rds of what they are in the south.

"So that would cost €10 billion to equate social welfare payments and public sector pay."

In terms of the impacts on this economy, Fitzgerald said that finding €20 billion is "like a third of a bank bailout every year".

"It's a lot of money so it would be very expensive," he explained, adding: "The solution is if Northern Ireland dramatically changes how they run their economy, particularly in the education sphere."

He said that this would mean that "the gap between the north and the south would narrow and also that their revenue would rise substantially more".

However, Professor Fitzgerald also highlighted that changes of this level in education could take "probably around 20 years before they caught up".

The conclusion of the report itself reads as follows: