The cost of paying for unification would be €3 billion in the first year and the need for a subvention from the United Kingdom would disappear after nine years, if not earlier, a new study argues.
The report, published on Thursday, is the result of research conducted by Dublin City University (DCU) and the Ulster University Economic Policy Centre, partly funded by The Ireland Funds.
The cost of unification given in the report takes into account transfers from the Treasury in Whitehall, along with the cost of bringing wages and pensions in the North into line with the Republic.
The deficit in public finances would last for between five and nine years, depending on economic growth, but would gradually decline over that time, according to the report, authored by Professor John Doyle, vice-president for research in DCU.
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Bringing wages for public sector workers in the North into line with their better-paid equivalents in the Republic would cost taxpayers an extra €152 million per annum for 15 years.
However, the costs of dealing with Northern public sector and state pensions would be a fraction of the costs estimated by others, requiring an additional €115 million per annum, over 40 years.
“If Northern Ireland replicates growth of the best Eastern European economies between 2000 and 2023, its gross national income would reach the same level as the Republic in 25 years, but the fiscal deficit would end in year five,” says the report.
The study describes itself as the first peer-reviewed report “to calculate the cost of unity over the first 10 years which takes account not only of the subvention, but necessary investment and gradual economic convergence with the rest of the island”.
