The Economic War

The Economic War

The Background

  • The Economic War, also known as the Anglo-Irish Trade War, was a key part of the relationships between Northern Ireland and its neighbours from 1932 to 1938.
  • It stemmed from the dispute over repayment of land annuities to the United Kingdom, which were part of the 1921 Anglo-Irish Treaty.

The Conflict

  • Eamon de Valera, the leader of Fianna Fáil, expressed his intention to remove the oath of allegiance to the British monarch after they won the 1932 election. This led the United Kingdom to demand the annuities.
  • After the payments were withheld, Britain imposed import taxes on Irish goods, which led to Ireland responding with similar measures. This cycle escalated the economic conflict.
  • The economic war primarily affected Irish farmers, causing fall in cattle and agricultural exports.

Resolution

  • The end came in 1938 with the Anglo-Irish Agreement. This was a compromise, where Eire compensated Britain with a lump sum payment in return for the removal of trade barriers and return of some Irish ports.
  • The Economic War was a major event that impacted Irish relations with the United Kingdom, and had long-lasting effects on its economy and society.

Impact on Northern Ireland

  • The economic war had a less significant impact on Northern Ireland, which remained part of the UK, than it did on Eire.
  • Overall, the conflict was more damaging to Eire’s economy. On the other hand, Northern Ireland was able to maintain its trade with the rest of the UK and enjoyed some economic growth during this period.
  • It further highlighted the differences and growing tensions between Eire and Northern Ireland.

Key Points to Remember

  • The Economic War was driven by a dispute over the land annuities from the 1921 Treaty, and desire of Eamon de Valera to reduce British influence in Ireland.
  • The conflict ended with the 1938 Anglo-Irish Agreement, a trade-off that was viewed as a compromise.
  • The impact was uneven, causing much more damage to Eire’s economy than Northern Ireland, but it increased a sense of separation between the two areas.