At least we now know where we are now in Ireland, North and South, in the worst financial crisis to have hit the island in living memory. At time of writing the Irish Finance Minister, Brian Lenihan, has said that a significant proportion of the €15 billion which must be slashed from public spending before 2014 to get the Republic’s budget deficit down to the level required by the EU must be cut from the government’s budget in the coming year. Commentators are suggesting that this will see up to €5 billion in spending cuts from December’s budget, much of it in public services such as health, education and welfare.
Meanwhile Northern Ireland appears to be facing cuts of around a quarter of that – up to £5 billion (€5.6 billion) over four years rather than one – as part of the British government’s draconian £81 billion ‘spending review’ cutbacks.
On 1st October the nationalist Irish News put it well in an editorial entitled ‘It’s even worse in the Republic’. This highlighted not only the Republic’s almost unbelievable public spending deficit – at 32% of Gross Domestic Product the worst ever recorded in a developed country in peacetime – but also the related problems brought about by the bank bail-out. The Anglo-Irish Bank debacle alone will cost the Irish taxpayer up to €34 billion while the total bill for the bank bail-out will be an incredible €50 billion.
The Irish News noted sensibly that while the North is faced with extremely painful cutbacks, being part of the UK had its advantages at a time like this: “At least we are part of a wider economic system which may have been weakened by the banking crisis but is showing signs of recovery. The Republic’s economy, on the other hand, is on life support.”
So where do these jaw-dropping figures leave the fragile growth that is North/South and cross-border cooperation, the essential ‘Strand Two’ of the peace process in Ireland? The first thing to keep saying is that increased trade and business between the two parts of the island can both increase the competitiveness of the Republic and strengthen the private sector in the North, goals which the Irish and British governments are endlessly setting for themselves.
In an Irish Times article last year, Dublin business consultant Michael D’Arcy and I interviewed six business leaders and economists about how North/South cooperation could help the ‘island economy’ get out of recession.1 They agreed on a number of things: that Southern firms should use the North to source goods and services that they had previously sourced more expensively elsewhere in Europe; there were real opportunities for firms locating in Belfast, where labour and property costs were 30% lower than in Dublin, and up to 50% lower than in London; smaller companies, particularly in innovative areas like electronics and healthcare, should link with partners across the border to develop and market new products; and overall, business needed to see the two jurisdictions on the island as a competitive opportunity rather than a barrier.
And what about public sector cooperation? I’m glad to see that the Northern Ireland Civil Service will have a session on ‘Maximising North/South Opportunities’ at its big ‘NICS Live’ event on 16 November. For there remains a real challenge for those of us leading the way in North/South cooperation to prove to politicians and civil servants that it really makes sense to cooperate for mutual benefit across the Irish border; that it is a way to deliver better public services, and even – occasionally – to save money. Given the still low level of practical, concrete cross-border cooperation projects between government departments, public agencies and local authorities, we clearly haven’t been getting that message across adequately during the good times of the past decade. Now we have the much greater challenge of doing it during the worst recession for 80 years.
However let’s not make the mistake of thinking that North/South cooperation is only, or even mainly, about supplying goods and services, and thus making (and saving) money, across the Irish border. Let’s not forget that this is part of an extraordinary but still fragile peace process (witness the recent growth of dissident republican groups). Earlier this year the Centre for Cross Border Studies submitted a report to the two Departments of Education on cross-border exchange projects between schools and youth organisations. This estimated that well over 150,000 children and young people had been involved in projects like the European Studies Programme, Dissolving Boundaries, Civic-Link, Education for Reconciliation and the International Fund for Ireland’s Wider Horizons, KEY and LET programmes over the past 10-20 years.
This must be the largest cross-border movement of young people for the purposes of education and mutual understanding anywhere in the world in recent memory. This movement affects not only the students themselves, but their teachers, their families and their communities. Quietly and steadily, hundreds of teachers, youth workers and others – largely funded by the EU Peace Programme, which is now running out – have been working away under the radar to try to make sure that the poison of centuries of suspicion and misunderstanding starts to be eradicated through these exchanges. I fear for this movement of idealists and children in the present ferocious climate. I hope there are at least a few wise policy makers in Dublin and Belfast who will realise that even in these hardest of financial hard times, this work must continue, albeit on a reduced basis.
1 ‘Time to drop ‘unpatriotic’ tag on trading with North’, Irish Times, 25 March 2009