3 Min Read
LONDON (Reuters Breakingviews) - Northern Ireland may be about to vote for its own eventual spinoff. The outcome of upcoming elections in the UK member state may see London again having to rule the thorny region directly. Given the high cost of propping up the region, and the problems with potentially reunifying it with Ireland to the south, the north is becoming a problem that no one wants.
Under the terms of a 1998 peace agreement, the region is jointly governed by the largest parties on either side of the nationalist-unionist divide. Right now, those parties are the Democratic Unionist Party and Sinn Fein. Rancor between the two collapsed their power-sharing arrangement in January, triggering Thursday’s election. If the DUP’s Arlene Foster and Sinn Fein’s Michelle O’Neill cannot agree to form a new government, there is a real prospect of a return to direct rule from London.
To say Britain’s Prime Minister Theresa May doesn’t need the hassle is an understatement. Northern Ireland’s weak economy, subsidised to the tune of approximately 9 billion pounds annually, is already a drain. And it could get worse once Britain leaves the European Union. Agricultural subsidies from Brussels account for 103 percent of farm incomes, according to the Northern Ireland Assembly.
Nor can Britain simply call the union a day. Reuniting the north and south of Ireland would be politically toxic to the North’s loyalist population. And it would be poison too to Ireland’s economy, with the extra costs reducing household income in the south by 15 percent according to economist John FitzGerald.
The prospect of the north standing on its own two feet economically looks equally remote. It’s the least innovative region of the UK, with 27 percent of all employment in the public sector, compared with 17 percent in Britain. Plans for export-led growth are challenged by the possible re-establishment of a border with the south once Brexit happens.
Since factions in Scotland are pushing for independence, the British government has powerful motivations to keep the respective bits of the United Kingdom together. But that is a fragile situation. Add political dysfunction to a dismal economic track record, and Westminster may decide it’s no longer worth staying invested.
On Twitter twitter.com/Breakingviews
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.