By the end of World War II, Great Britain’s economy was in shambles as the war effort had completely drained financial reserves.  It was no longer affordable to govern the vast, global empire held the previous century, and its colonial empire disintegrated.  Around this time, in 1948, Ireland completely withdrew from the British Commonwealth and became a truly free, independent republic.  In 1973, Ireland joined the European Community, today’s European Union (EU).  The Irish government created its own currency, the Irish pound, the exchange rate of which was closely linked to the British pound.  When the common EU currency, the euro, was introduced throughout the union as a replacement for the individual currencies of the various EU members, the Republic of Ireland voted to convert to the use the euro as its primary currency.  Great Britain joined the EU, but not the Economic and Monetary Union (EMU).  Therefore, Northern Ireland’s economy has always and continues to function under the British pound, and does not participate in the euro currency bloc.

Known for its pub culture and green, bucolic countryside, Ireland’s economy thrives on tourism.  It is estimated that over 90% of the population is Catholic.  As the country is relatively small, with a population estimated at 3.8 million in 2000, it depends greatly on exports, especially to the EU member states and the United States.  Recently, due to high amounts of foreign direct investment and the development of multi-national corporations headquartered in Ireland, the Irish economy has witnessed unprecedented economic growth and the economic, social and political benefits and drawbacks that accompany such growth.  Because of historically high levels of poverty, Ireland faced a large emigration rate until recently, as the economic boom and the benefits of previous investment in infrastructure have improved overall living standards.

Social movements have existed from the beginning of Irish independence in 1921 for reunification of the two Irelands, as civil upheaval between the Catholic and Protestant population clashed over the issue.  The seeds of the religious conflict grew from the 17^th century when English Protestants built plantations on valuable Irish land.  The Irish Catholics felt deprived of their resource and grew resentful.

POST-INDEPENDENCE (1921)

The long-existing tensions were exacerbated in 1921, the year that the Republic of Ireland gained independence.  The northern 26 counties commonly known as Ulster, the “wealthiest and most Protestant part” of the isle, remained under the jurisdiction of the United Kingdom.  In these better-endowed areas settled, for the majority, those loyal to England, the Protestants.  As they had in the 17^th century, the British benefited financially from the valuable resources available in that region and the Catholic population, again, felt suppressed.

THE TROUBLES

The geographic partition of Ireland mirrored the divide within society, as the Catholics were left with embittered sentiments that Ulster belonged with the rest of Ireland, and the Protestants were content to remain under the rule of Great Britain.  Each side strongly and passionately believed in their cause, and the result was hostile conflict.  Over the last several decades, the climax of the clash between the two groups culminated in Northern Ireland’s capital of Belfast with years of harsh violence and terrorism that came to be known as “The Troubles.”

Political groups formed to lobby for each side’s cause.  The Catholics, pro-reunification with Ireland, were commonly referred to as nationalists or republicans, and the Protestants, loyal to the British, were called loyalists or unionists.  An example of a nationalist political party is the Sinn Fein, the group credited with the 1921 victory that led to independence of Ireland.  The infamous Irish Republican Army, or IRA, which sometimes resorted to terrorism in the fight for its cause to fight for reunification, was associated with the Sinn Fein.   An example of a rival loyalist party is known as the Ulster Unionists, a group with staunch beliefs in support of maintaining the union with Great Britain.

As stated by Political Geography Professor Syed Hasnath, “If existing cultural hostilities are the fire, inequality is the fuel to the fire that leads to terrorism.”  The Irish Catholics historically felt adverse feelings toward the British for centuries of subjugation, with British financial and military superiority preventing the Irish from doing much to oppose them.  When the better endowed northern counties were those counties retained by the United Kingdom in 1921, levels of inequality increased even more.  This inequality instigated rage among the people and eroded social cohesion.  Inequality by definition suggests that some people are better off than others; some are “haves” and others “have nots.”  In the case of the Northern Ireland and Ireland conflict, the Catholics considered themselves the “have nots,” and in that position, felt they had nothing to lose in the fight for their cause.  This led to the use of terrorism by radical groups such as the Irish Republican Army and social fear and instability.

In April of 1998, the British and Irish governments came together in an historic attempt to settle the conflict that had taken thousands of lives through brutal acts of terrorism of both the Catholics and the Protestants.  After long negotiations between 12 Northern Irish political parties, it was agreed that “Britain (would keep the) province, but (the) Republic gain(ed) a voice in its affairs.”  This agreement came to be known as the Belfast Agreement, or the Good Friday Agreement, and was signed on May 22, 1998.  A Northern Ireland Assembly with 108 seats was established in which both Catholic and Protestant representatives would jointly govern Northern Ireland.  The Republic of Ireland agreed to amend its constitution by eliminating claims on Ulster territory.  Other councils were set up to improve relations between the governments, including the North-South Ministerial Council (between Northern Ireland and the Republic of Ireland) and the British-Irish Council (between the Republic of Ireland and Great Britain) to name two examples.

“The United Kingdom Unionist Party advocates full and equal rights for everyone, regardless of their political, religious or cultural orientation. The Party's central purpose is to maintain the UNION between Northern Ireland and Great Britain, as this is in the best interests of all of the people of Northern Ireland.

 This Party fully supports the aim of peace and reconciliation and is determined that those who use or threaten violence and retain the means to do so shall no say in the governance of Northern Ireland. To do otherwise would be to accept peace at a price that no democrat should be asked to pay. The UK Unionist Party remains resolutely opposed to the immoral provisions of the Belfast Agreement that have violated the basic principles of democracy by installing the front men for terror into Government. There can be no role whatsoever in any democratic institution for those who remain inextricably linked to terrorist organisations. UK Unionism seeks to apply the same standards of democratic accountability as available elsewhere in the United Kingdom.”

ECONOMIC HISTORY

Before 1921, the 26 counties of Ireland and 6 counties of Ulster were governed under British rule, and therefore, the British pound.  Since Great Britain did not join the EMU, Northern Ireland continued to use the British pound.  After the signing of the Belfast Agreement, Northern Ireland remained a British holding, and therefore, again, functioned still under the British pound.

Alternatively, the Republic of Ireland established its own currency, the Irish pound, once it became independent.  In 1973, Ireland joined the European Union, and agreed to, in join the EMU in launching a single European currency, the euro, with the Maastricht Treaty of 1991.  According to the European Union Online, a single currency offers “five advantages to the citizens of Europe:

·         a more efficient single market after disruptions to trade and investment by exchange-rate adjustments have been eliminated

·         growth and employment will be stimulated by better borrowing conditions and a currency based on sound economic foundations

·         an end to the costs of converting between currencies

·         greater international stability by means of a new currency on an equal footing with the dollar and the yen

·         monetary sovereignty regained through collective management of a single monetary policy. A national monetary policy is no longer a sustainable option with capital flowing freely between interdependent economies.”

The United Kingdom has been a global financial powerhouse for centuries.  It has to date not joined the EMU, as its currency is one of the strongest in the world historically and in the present.  Therefore, Northern Ireland continues to function under the pound.

In Northern Ireland, a new plan for economic development called Strategy 2010 was introduced in 1999.  Strategy 2010 reports on economic conditions affecting Northern Ireland, including economic statistics on topics such as unemployment and sector production in relation to GDP.  The plan recommends an economic strategy to be pursued through the first decade of the century.

Both the Republic of Ireland and Northern Ireland are presently demonstrating the economic benefits that follow carefully planned political liberalization and government assistance.  These benefits have led to higher standards of living in both countries never before experienced.