The UK isn’t likely to face a bailout from the IMF which would advance the economic cause for Irish unity, experts in Northern Ireland have said.
Commentator Paul Gosling and economist Richard Ramsey said they disagree with author David McWilliams, who has argued that the UK is at major risk of needing a bailout by the International Monetary Fund (IMF).
In an interview with Mark Carruthers on BBC’s The View on Thursday, Mr McWilliams, an economist, said that a UK bailout would make a united Ireland more appealing, as the Republic’s economy would look more stable.
Paul Gosling, an economic commentator based in the north west
The Republic’s economy was itself bailed out by the IMF and EU in 2010, following the economic crash of 2008.
Mr Williams says the UK is facing a “political/financial cul de sac” due to slow economic growth, strained public finances and high interest rates. He told The View there was a “very significant” chance of a bailout for the UK within the next two years.
But Richard Ramsey said it he didn’t think there was any risk of an IMF bailout for the UK.
“The Labour government would be sensitive to how things are progressing and they would never let things slip so far to get to that point.”
He said it would also have an array of options such as breaking manifesto promises and increasing income tax or fuel duty or breaking the triple lock on pensions, before turning to the IMF.
Richard Ramsey
“It’s not the same situation as the Republic’s IMF bailout, when the Irish government had to capitulate and do what it was told. The Irish government had no real options,” he added.
The UK also has its own independent central bank, the Bank of England, which gives it the option of essentially printing money through quantitative easing. “But Ireland didn’t have that and had to be totally subservient to what Brussels and Berlin were demanding.”
And he said the fact the UK can set its own monetary policy remains a big economic argument for Northern Ireland against Irish unity.
“You’d rather be hitched to an economy that has its own independent central bank — that would be one argument that economists would say, rather than any of the constitutional issues, and the Republic of Ireland doesn’t have that.”
A united Ireland mural in Belfast. Photo: Charles McQuillan/Getty
Mr Gosling, a former SDLP adviser and author of A New Ireland, said Mr McWilliams’ comments were “highly provocative” but touched on “timely concerns”. “We have little idea of what Trump will do in practice with regard to international trade, nor, therefore, how that will impact the UK and the EU, including Ireland.
“Several EU nations are in economic and political difficulty, especially Germany and France. We can only really guess how those factors will impact Ireland. “Similarly, while we can recognise the fiscal crisis the British government is grappling with, it is difficult to predict how this will play out.”
He added: “Going to the IMF for a bail-out is perhaps unlikely, but is possible.
“I think the strongest argument for Irish unity is the complete incapacity of Stormont to function effectively.”