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Irish finances would be hit by unification

The costs of a united Ireland would be large for Irish finances, according to a new assessment.

Fiscal transfers from the rest of the UK to Northern Ireland were £9.4bn in 2018/19. It implies either big budget cuts for Belfast or a very rapid rise in Ireland's deficit.

But the Capital Economics said the burden might not be as high as these figures suggest.

It notes the Northern Ireland budget deficit fell by 2% of its gross domestic product, equivalent to 0.3% of Ireland's GDP.

Jack Allen-Reynolds, Senior Europe Economist at the firm, said: "The Republic is currently running a small budget surplus, so even if there were a sudden move into deficit, the implications for the public finances would not be disastrous.

"And it's also possible that the UK would continue to make payments to the North for a while even after reunification, in order to ease the transition."

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