Costs of Irish unification.

James Brown · 10-01-2018 08:25PM

Jawgap wrote: »

Not at all. I'd imagine they'd negotiate a handover, reach some agreement on what their funding liabilities are in terms of cost and duration, then hand us the keys and wish us good luck while they go off and figure out how to spend the money they were previously ploughing into the place.

I agree they've nothing but face saving to tie them to the six counties at this stage. And yes, most assuredly the costs will be both ways.
Maybe the EU will give us a dig out after previously taking one for the team?

Jawgap · 10-01-2018 08:38PM

Matt Barrett wrote: »

I agree they've nothing but face saving to tie them to the six counties at this stage. And yes, most assuredly the costs will be both ways.
Maybe the EU will give us a dig out after previously taking one for the team?

Another myth.

They well provide cohesion funds, but are they really going fund day-to-day spending on education, health, social welfare etc?

And even if we do get some additional cohesion money, it's usual to come up with match funding, is it not?

James Brown · 10-01-2018 08:41PM

Jawgap wrote: »

Another myth.

They well provide cohesion funds, but are they really going fund day-to-day spending on education, health, social welfare etc?

And even if we do get some additional cohesion money, it's usual to come up with match funding, is it not?

It could be argued as a myth if posed as fact and not query.
Point is the idea of a financially appealing united Ireland is unlikely. For some of us, it's a small price, (what ever price that may be), for others they'll never see enough money in it.

FrancieBrady · 10-01-2018 08:43PM

Jawgap wrote: »

Another myth.

They well provide cohesion funds, but are they really going fund day-to-day spending on education, health, social welfare etc?

And even if we do get some additional cohesion money, it's usual to come up with match funding, is it not?

That is just another wait and see what can be negotiated situation. Because we really don't know.

Carlos Orange · 10-01-2018 08:55PM

FrancieBrady wrote: »

That is just another wait and see what can be negotiated situation. Because we really don't know.

Total cohesion funding for the whole EU seems to be about 10 billion a year.
Northern Ireland getting even 1 billion a year (10%) seems pretty unlikely even assuming there are no cuts when the brits stop paying into the EU budget.

murphaph · 10-01-2018 09:17PM

Matt Barrett wrote: »

The tax payer has done it before for far less reward.

Two wrongs don't make a right.

FrancieBrady · 10-01-2018 09:30PM

psinno wrote: »

Total cohesion funding for the whole EU seems to be about 10 billion a year.
Northern Ireland getting even 1 billion a year (10%) seems pretty unlikely even assuming there are no cuts when the brits stop paying into the EU budget.

We don't even know what is required or what support there would be for stability in Ireland. We would be wasting out time discussing it at this stage.

johnnyskeleton · 10-01-2018 09:34PM

Mod note:

Folks, this thread looks, to me anyway, like it has run its course and there seems to be less substantive discussion and more of this:

blanch152 wrote: »

It was pointed out to you repeatedly on that thread that you were wrong, and the parts of the GFA were explained to you clearly so you should be well aware by now that you are wrong.

FrancieBrady wrote: »

I am quite sure it was pointed out to you that you were wrong. From what I remember you couldn't get by this.

If the thread continues like this, we may have to close what has the potential to be an interesting and informative thread!

EDIT: ACD beat me to it two days ago:

ancapailldorcha wrote: »

If this thread is going to descend into pettiness and sniping then I'll have to lock it. Cut it out please.

So I guess this is a final, final warning!

Jawgap · 10-01-2018 09:56PM

Matt Barrett wrote: »

It could be argued as a myth if posed as fact and not query.
Point is the idea of a financially appealing united Ireland is unlikely. For some of us, it's a small price, (what ever price that may be), for others they'll never see enough money in it.

to put it in context, the €10 billion or so it takes to keep NI from consuming itself amounts to about 45% of the income tax take in the Republic.

Now realistically any unification government isn't just going to jack taxes and keep pouring money into NI, there's going to have to be a combination of tax hikes, cuts to services and some class of dividend.

Even if we assume there is going to be a dividend, and even we assume it amounts to a fantastical and unprecedented 33% of what's required, that still leaves a €6.6 billion sized hole in the accounts......if we get another 33% through service cuts, we're left with about €3.3 billion in taxes - or the equivalent of about 16% of the current PAYE tax take.

You get some extra money through harmonisation - by for example bringing NI's VAT Rate in line with ours.

As for the idea of the EU funding a chunk of the unification bill......how likely do you think that is as long as we insist on not talking about out CT rates? Would Macron et al not be of a mind to tell us to bump our CT rate to closer what the EU average is then come back and talk about expanded funding from Europe?

Jawgap · 10-01-2018 09:58PM

FrancieBrady wrote: »

Well, unless there is something definitive from the rest of the EU about what they would do and what they would actually need to contribute is arrived at, I will bow out of that discussion.

Can you point to one example where the EU funded health, education and SW non-capital spending in a MS?

jm08 · 10-01-2018 11:45PM

One way to tackle the problems of Northern Ireland would be to have joint authority by Irish and British Gov. for a certain number of years - say 10/15 years. I'd abolish Storment (nothing happens there anyway), have elections, continue to be represented in Westminister (I think there are 18 NI seats there) and have a similar number of seats for the Dail. After 10/15 years there could be a review and decide then whether to continue as is or go for a referendum on a UI.

murphaph · 11-01-2018 05:43AM

jm08 wrote: »

One way to tackle the problems of Northern Ireland would be to have joint authority by Irish and British Gov. for a certain number of years - say 10/15 years. I'd abolish Storment (nothing happens there anyway), have elections, continue to be represented in Westminister (I think there are 18 NI seats there) and have a similar number of seats for the Dail. After 10/15 years there could be a review and decide then whether to continue as is or go for a referendum on a UI.

Which country's courts would have supremacy? (Joint authority doesn't work because of this problem and having 2 governments in charge doesn't change the fundamentals that the NI economy is exceptionally weak).

There's no getting around it...there would be a generation of hardship for many people as the price of a UI.

Peregrinus · 11-01-2018 06:08AM

murphaph wrote: »

Which country's courts would have supremacy? (Joint authority doesn't work because of this problem . . . .).

In principle it's not an insoluble problem.

Currently appeals go through the NI court system as as the NI Court of Appeals. If there's a further appeal beyond that it goes to the Supreme Court of the UK.

In a joint sovereignty situation you could either provide simply that appeals stop at the NI Court of Appeals - there's nowhere to go after that - or that they go to a joint appeals court comprising, say, 1 judge from the UK Supreme Court, 1 judge from the Irish Supreme Court and 1 judge from the NI Court of Appeals (who hasn't previously been involved with the case under appeal).

I agree with you, though, that this isn't really relevant to the economic issues. NI benefits from enormous (relative to the NI economy) transfers from the UK, and if these were to cease in the context of NI becoming part of a United Ireland it's hard to see that this wouldn't have a very detrimental effect. You can argue with some justification that the level of NI economic activity and productivity is depressed by political instability, uncertainty, deadlock, etc, and this is probably true. And you can speculate (but it's only a speculation) that in the context of an agreed united Ireland this problem would be ameliorated and NI's economic performance would be improved. But such is the size of the transfer from the UK that it's unrealistic to speculate the the NI economy could improve by so much as to offset the loss of the transfer.

Jawgap · 11-01-2018 07:16AM

jm08 wrote: »

One way to tackle the problems of Northern Ireland would be to have joint authority by Irish and British Gov. for a certain number of years - say 10/15 years. I'd abolish Storment (nothing happens there anyway), have elections, continue to be represented in Westminister (I think there are 18 NI seats there) and have a similar number of seats for the Dail. After 10/15 years there could be a review and decide then whether to continue as is or go for a referendum on a UI.

In principle it's an idea worthy of consideration (bit more do-able if the Brits weren't Brexiting!), but as others have pointed out even when you overcome the legal and administrative issues, there still remains the question of funding.

We'd still be on the hook for half the subvention, which, as things stands, would leave us having to fork over some €4 to €5 billion per year - even if the Brits agreed to us paying a lesser amount (say 20%) we'd still have to come up with money in the billions rather than the hundreds of millions. And money going north is money that can't be spent in the Republic - I'm not sure how politically acceptable it would be to send money out of the country when there's plenty it could be spent on here.

And of course there's always the possibility the Brits would cut a deal that sees us pay nothing during a period of joint administration if they could be convinced it was a finite period that ends with them handing the place over.

murphaph · 11-01-2018 07:38AM

Jawgap wrote: »

In principle it's an idea worthy of consideration (bit more do-able if the Brits weren't Brexiting!), but as others have pointed out even when you overcome the legal and administrative issues, there still remains the question of funding.

We'd still be on the hook for half the subvention, which, as things stands, would leave us having to fork over some €4 to €5 billion per year - even if the Brits agreed to us paying a lesser amount (say 20%) we'd still have to come up with money in the billions rather than the hundreds of millions. And money going north is money that can't be spent in the Republic - I'm not sure how politically acceptable it would be to send money out of the country when there's plenty it could be spent on here.

And of course there's always the possibility the Brits would cut a deal that sees us pay nothing during a period of joint administration if they could be convinced it was a finite period that ends with them handing the place over.

Even after all that they'd be handing us 4 to 5 more "counties that need social transfers indefinitely". The republic is already mostly comprised of such counties, all requiring large scale social transfers from the urban areas, mostly east Leinster and Cork. The likes of Donegal and Kerry will simply never run a surplus no more than the peripheral regions of almost any European country.

A UI brings more of the same.

The only way a UI can break even is if the greater Belfast area can pull its economic weight and generate enough wealth to provide the social transfers that Fermanagh, Tyrone, Derry and Armagh (and parts of Antrim and south Down) will ALWAYS need, just as similar counties in the republic do today and will continue to do so.

Peregrinus · 11-01-2018 07:38AM

The bottom line is that, as matters stand, to make reunification economically attractive to NI you have to project a simply enormous "reunification dividend" for the NI economy. Interim payments or transitional support from the UK or the international community would put off this problem, but not avoid it. And I think if you are projecting a big dividend, that has to be based on more than just wishful thinking and a bit of hand-waving. There needs to be some serious analysis of why the NI economy is so woefully underproductive, and some clear thinking about whether and to what extent the factors that keep it so would be alleviated by reunification.

murphaph · 11-01-2018 07:45AM

Peregrinus wrote: »

The bottom line is that, as matters stand, to make reunification economically attractive to NI you have to project a simply enormous "reunification dividend" for the NI economy. Interim payments or transitional support from the UK or the international community would put off this problem, but not avoid it. And I think if you are projecting a big dividend, that has to be based on more than just wishful thinking and a bit of hand-waving. There needs to be some serious analysis of why the NI economy is so woefully underproductive, and some clear thinking about whether and to what extent the factors that keep it so would be alleviated by reunification.

See my post above. Even if Fermanagh, Derry, Tyrone, Armagh, north Antrim and south Down were all dragged up to the productivity levels of Donegal, Leitrim, Roscommon, Westmeath, Offaly, Kerry etc. etc. etc. they would all STILL need massive social transfers from east Leinster, Cork and (in a best case scenario) the Belfast area.

Peregrinus · 11-01-2018 07:59AM

murphaph wrote: »

See my post above. Even if Fermanagh, Derry, Tyrone, Armagh, north Antrim and south Down were all dragged up to the productivity levels of Donegal, Leitrim, Roscommon, Westmeath, Offaly, Kerry etc. etc. etc. they would all STILL need massive social transfers from east Leinster, Cork and (in a best case scenario) the Belfast area.

Well, there's no reason why some of those areas shouldn't get to productivity levels much higher than Roscommon, Leitrim, etc. They have much greater population density; they either have or are much closer to major urban areas, etc, etc.

But, basically, I agree with you. I don't see a good case being made for expecting a reunification dividend which would replace the transfer from the UK. The onus is on those who argue that such a dividend can be looked for to make the case; I'm seeing no serious effort to do this, and I'm sceptical that it can easily be done.

On the other hand, the indefinite payment of a transfer from the UK at the current level cannot be assumed, especially if Brexit is as painful for the UK as some think it might be. There could be a double whammy for NI; further reductions to the productivity of the NI economy as a result of hardening of the border, plus financial/political pressure on the payment of the transfer from an increasingly cash-strapped UK government. In that scenario the opportunity cost of reunification - loss of the transfer - is less, since the transfer declines anyway, and the benefits of unification are greater, since removing the Irish border will reverse some of the damage done by Brexit. Plus, if long-term economic growth in the RoI continues to outstrip that in GB it becomes more and more feasible to think of the RoI replacing at least a part of the transfer from GB.

In short, this is a moveable feast. Right now it seems hard to construct an economic argument for reunification that stacks up well, but that could change in the future, especially if the economic benefits of integration into the UK become less and less.

FrancieBrady · 11-01-2018 08:36AM

Does anyone know precisely why there was such a dramatic rise in the subvention since the GFA?

Jawgap · 11-01-2018 08:45AM

FrancieBrady wrote: »

Does anyone know precisely why there was such a dramatic rise in the subvention since the GFA?

The price of peace......or to put it another way, its the result of the growth of the "Don't-hit-us-we're-holding-the-peace-process" strategy around which an entire industry has grown up.

FrancieBrady · 11-01-2018 08:48AM

Jawgap wrote: »

The price of peace......or to put it another way, its the result of the growth of the "Don't-hit-us-we're-holding-the-peace-process" strategy around which an entire industry has grown up.

Involving what exactly?

Jawgap · 11-01-2018 09:00AM

FrancieBrady wrote: »

Involving what exactly?

Pretty much anything that can be tagged as relevant to the prace process.

Let's take Titanic for example - stunning building, great attraction but it soaked up over £60m in public funding.

FrancieBrady · 11-01-2018 09:08AM

Jawgap wrote: »

Pretty much anything that can be tagged as relevant to the prace process.

Let's take Titanic for example - stunning building, great attraction but it soaked up over £60m in public funding.

And is the biggest tourist attraction in Europe (I thnk)

It generated 105 Million in just 3 years for the NI economy, so that is a + investment.

https://www.irishtimes.com/news/ireland/irish-news/more-than-3-million-people-visit-titanic-centre-in-belfast-1.2757297

60m doesn't explain the massive rise though.

Any more detail?

Jawgap · 11-01-2018 09:17AM

FrancieBrady wrote: »

And is the biggest tourist attraction in Europe (I thnk)

It generated 105 Million in just 3 years for the NI economy, so that is a + investment.

https://www.irishtimes.com/news/ireland/irish-news/more-than-3-million-people-visit-titanic-centre-in-belfast-1.2757297

60m doesn't explain the massive rise though.

Any more detail?

Well it was just an example - but it's illustrative. The public purse being prevailed upon to stump some 60% of the cost of a project about which the NI Audit Office said

Utilising £60 million of public funds, it will be more expensive and will deliver less financial benefits than a proposed alternative attraction at the Odyssey. The Titanic Signature Building option was chosen because DETI/NITB considered the non-monetary benefits to be significantly better than the Odyssey option.

It's symptomatic. The internet and the NI Audit Office's site is replete with examples - instead of taking the NI approach and relying on someone else to do your heavy lifting, just go an do it yourself on their site - www.niauditoffice.gov.uk

FrancieBrady · 11-01-2018 10:22AM

Jawgap wrote: »

Well it was just an example - but it's illustrative. The public purse being prevailed upon to stump some 60% of the cost of a project about which the NI Audit Office said

When you say 'public purse' are you including/excluding EU funds?

Jawgap · 11-01-2018 10:31AM

FrancieBrady wrote: »

When you say 'public purse' are you including/excluding EU funds?

What?

Where do you think the EU money comes from? Some magic money tree in Brussels?

The EU budget:
is funded chiefly (98%) from the EU's own resources, supplemented by other sources of revenue;

.....Own resources account for approximately 98% of the budget.

Three types of own resources:
Traditional own resources: consist mainly of customs duties on imports from outside the EU and sugar levies. EU Member States keep 20 % of the amounts as collection costs.

Own resources based on value added tax (VAT): a uniform rate of 0.3 % is levied on the harmonised VAT base of each Member States.

Own resources based on GNI: each Member State transfers a standard percentage of its GNI to the EU. Although designed simply to cover the balance of total expenditure not covered by the other own resources, this system has become the largest source of revenue of the EU budget.

FrancieBrady · 11-01-2018 10:42AM

Jawgap wrote: »

What?

Where do you think the EU money comes from? Some magic money tree in Brussels?

Is it not an entirely different thing to say that i.e. 'the 60m came from the subvention' or 'the 60m came from a mixture of funds from the subvention and the EU'

One being the 'UK contributing the costs' and the other being the 'UK and the rest of the EU countries contributing the funds' and both can be called 'the public purse'.

I am not sure where the aggressive lecturing 'some magic money tree in Brussels' is coming from or whether it is warranted.

Jawgap · 11-01-2018 11:13AM

FrancieBrady wrote: »

Is it not an entirely different thing to say that i.e. 'the 60m came from the subvention' or 'the 60m came from a mixture of funds from the subvention and the EU'

One being the 'UK contributing the costs' and the other being the 'UK and the rest of the EU countries contributing the funds' and both can be called 'the public purse'.

I am not sure where the aggressive lecturing 'some magic money tree in Brussels' is coming from or whether it is warranted.

Well as you'd say yourself, I never mentioned subvention.

And its public money - it's money someone had to earn before paying it over.

But I guess it's ok to be wasteful with public money as long as some other tax payers forked it over - not exactly an attitude that would give the Republic's or any other EU Member State's tax payers the warm fuzzies towards NI.

FrancieBrady · 11-01-2018 11:22AM

Jawgap wrote: »

Well as you'd say yourself, I never mentioned subvention.

And its public money - it's money someone had to earn before paying it over.

But I guess it's ok to be wasteful with public money as long as some other tax payers forked it over - not exactly an attitude that would give the Republic's or any other EU Member State's tax payers the warm fuzzies towards NI.

Again with the agression.

I asked: Does anyone know why the SUBVENTION took a massive rise since the GFA.

You answered: Peace dividend, - Titanic Centre being an example.

I asked, How much of that is Subvention and how much is EU funding.

You started lecturing on 'Magic money trees' and 'Fuzzies'.

So I will ask the question again.

Does anyone know why the Subvention took a massive rise after the GFA even though their was also huge increases in EU funding?

murphaph · 11-01-2018 11:33AM

FrancieBrady wrote: »

Again with the agression.

I asked: Does anyone know why the SUBVENTION took a massive rise since the GFA.

You answered: Peace dividend, - Titanic Centre being an example.

I asked, How much of that is Subvention and how much is EU funding.

You started lecturing on 'Magic money trees' and 'Fuzzies'.

So I will ask the question again.

Does anyone know why the Subvention took a massive rise after the GFA even though their was also huge increases in EU funding?

Here's some bedtime reading Francie...

http://www.portlandtrust.org/sites/default/files/pubs/epm_northern_ireland.pdf

Costs of Irish unification.

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