The Island of Ireland
Two Distinct Economies
Despite the Northern Ireland Protocol promoting the concept of an ‘all-island’ Irish economy, this concept is a ‘fiction’, an ‘illusion promoted for political ends,’ argues a new report from Policy Exchange.
‘The Island of Ireland: Two Distinct Economies’, authored by Dr. Graham Gudgin, Policy Exchange’s Chief Economic Advisor, concludes the ‘all-Island economy’ of Ireland is actually two economies with little integration, despite the decades of relative peace since the signing of the Good Friday Agreement in 1998. The two economies, he says, have as many differences as any two neighbouring economies in Europe.
“It is more accurate to say that there are two distinct economies on the island of Ireland. The Republic of Ireland is a sovereign state, fully part of the European Union but also one of the world’s largest tax havens. Northern Ireland is a region of the economic union which is the United Kingdom. With different currencies, different fiscal and monetary arrangements including different interest rates and VAT excise duties, and with separate legal systems, the two areas are distinct.” Only 4% of the goods and services produced in Northern Ireland cross the border to the Republic while 16% go to GB; 31% of imports to NI are from GB. Only 2% of the Republic’s exports go to Northern Ireland.
‘The Island of Ireland: Two Distinct Economies’ also includes forewords from The Rt Hon. Lord Trimble, former First Minister of Northern Ireland who won the Nobel Peace Prize for his role in securing the 1998 Belfast Agreement, as well as the Rt Hon. Lord Frost, former Chief Negotiator for Exiting the European Union.