There has been increasing debate about reunification as a hard Brexit looks far more likely.

Leaving the politics aside, from the point of view of economics and particularly trade there are big hurdles.

Those challenges have become even more daunting with the prospect of a hard Brexit, not less so.

The North is running a deficit of £9.2 billion (€10.5 billion) per annum according to its Department of Finance.

That is the gap between what it collects in taxes and what it spends. It is met by funding from Britain.

That compares with a deficit of €1.2 billion in the Republic in 2017.

Obviously if there was a 32-county Republic it would need financial support, possibly from the EU and Britain, to make reunification work.   

None of that is new but what has changed is the prospect of the UK leaving the EU’s Customs Union, which allows for tariff-free trade between member countries.

That means levies would be imposed on goods and services travelling to and from Britain.

Crucial to this consideration is this question: Where are the main export destinations for firms based in Northern Ireland?

Figures from the Department of the Economy in the North for 2015 show sales (or exports) to Britain were £13.8 billion (€15.9 billion), exports to the Republic were £3.4 billion (€3.9 billion), while exports to the rest of the EU were £1.9 billion (€2.1 billion).

In a nutshell, firms in the North are far more dependent on selling to Britain than companies in the Republic.

A reunified Ireland would be inside the Customs Union with the border into the EU running the length of the Irish Sea.

However, the firms in the North that had been dependent on exporting to Britain would find tariffs imposed on their exports to post-Brexit Britain.

Those companies would need significant amounts of aid to survive and find new markets elsewhere.

So not only would the 32-county state struggle with the existing deficit in the North, it would also face the mammoth task of re-orientating the exporting sector in the six counties.

Reunification is a bit like Brexit itself, it is the complicated details that tend to be overlooked.


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