Stability at stake in Northern Ireland as 'Brexit' risk grows

(NEWRY) - The only part of Britain to share a land border with the rest of the European Union, Northern Ireland is anxiously awaiting a referendum on EU membership that could spell economic and sectarian trouble.

Britain is planning a vote on whether to leave the 28-member bloc by the end of 2017, and a "Brexit" could be disastrous for a province where EU funds and the common market have helped bolster peace and trade.

In the market town of Newry, seven kilometres (four miles) from the Republic of Ireland, Europe is part of daily life, and businesses, parking meters and the few remaining telephone booths all accept euros as well as Britain's sterling currency.

"Leaving the EU would be a complete disaster for Northern Ireland," said Newry resident John Donnelly.

"I buy my fuel in the Republic of Ireland because of the exchange rate and difference of taxation, it's between 15 and 20 percent cheaper," Donnelly said.

In 2008, thanks to shoppers taking advantage of a strong euro, cars from Ireland clogged roads to Newry, a phenomenon known as the "Newry effect."

Now, due to a stronger pound, the shopping traffic has reversed, while others cross the border on their daily commute or to visit family.

For Donnelly, the return to the border controls that preceded the birth of the single European market in 1993 would be "inconceivable."

The feeling is shared by many in Northern Ireland who, like the Scots and the Welsh, tend to be more pro-European than the English.

UKIP, the anti-European party headed by Nigel Farage that has made major inroads in England, has not fared so well elsewhere.

"The reason why the EU is helpful is because it provides a political framework for small countries which sometimes feel like they're being dominated by England," said John Springford from the Centre for European Reform, a think tank.

"The biggest risk for Northern Ireland is really political."

- 'Going back light years' -

Many in Ireland, both in the north and south, worry about the impact of a potential "Brexit" on a fragile peace after decades of communal violence that claimed more than 3,000 lives.

Leaving the EU and its common market would once again throw up barriers between Northern Ireland and its southern neighbour, potentially rekindling republican calls for a unified Ireland, experts said.

"It would be going back light years, you would be going back to old times, which would be hugely negative," said former Irish premier Bertie Ahern.

The EU also played an important role in consolidating peace by injecting as much as 1.3 billion euros ($1.4 billion) in Northern Ireland between 1995 and 2013.

Jobs and economic growth were seen as crucial in helping to calm tensions between Catholic republicans and their Protestant, pro-British rivals.

"The peace funds have been very welcome. Europe was a very important actor in the peace process and people here know that. Those funds remain critical to help build a new Northern Ireland," said Stephen Kelly, chief executive of Manufacturing Northern Ireland, a trade organisation.

The eurozone represents about 60 percent of all Northern Ireland's exports, and its farming community has benefited greatly from the EU's common agricultural policy, Kelly said.

Northern Ireland is also a net recipient from the EU budget, unlike Britain as a whole, which is a net contributor.

Wages are 22 percent lower in Northern Ireland than the EU average, making the province particularly vulnerable to an economic slump should Britain turn its back on the EU.

"The general populace would be very much more sympathetic towards remaining in the EU than in other parts of the UK. I think the public is pro-Europe on a two to one basis at least," said Kelly.

The trouble for Northern Ireland, however, is that it represents less than three percent of Britain's population, Springford said.

"The outcome of the referendum will be decided in England and nowhere else."

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Kelly