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1945 - 1963: The birth of the Irish Republic and Economic Development
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In the 1948 General Election de Valera's party was defeated by a coalition led by John Costello. Costello announced his intention to steer Eire out of the British Commonwealth thus making it a fully independent Republic. The UK, which was now ruled by a Labour (a left wing party) government, was greatly troubled by this, as it didn't want to see the Commonwealth collapse. The Commonwealth did not collapse, but at the time it was feared that it could start a domino effect. Within Northern Ireland, the Stormont government was concerned that Eire might be thinking about an active campaign for a united Ireland. Their fears grew when a group of Northern Ireland nationalists, who had banded together under the banner "Anti-Partition League" in 1945, grew rapidly and received support from Eire. The Eire government told Stormont that it would give Unionists "any reasonable constitutuional guarantees" if they would agree to a united Ireland. However the NI Prime Minister, Basil Brooke dismissed the offer saying "Ulster is not for sale." Brooke then appealed to the UK government that gave him a guarantee that the status of Northern Ireland would not change without Stormont's approval.

To back up his claim that the people of Northern Ireland still wanted the union to stay, Brooke called an election in February 1949. The Unionists were greatly angered when the Eire government gave money to the Anti-Partition League to fight the election. Despite winning 40 of the 52 seats, the Unionist politicians were still unnerved by the attempt on the part of Eire to interfere in Northern Ireland affairs.

On Easter Monday 1949 Costello brought Eire out of the British Commonwealth and proclaimed that it was now a fully independent republic. Eire was then renamed the Republic of Ireland. Costello was sure that this formation of a Republic would satisfy Irish Republicans and would finally stop the violence in Ireland. He did not, however, realise that many Republicans were still not satisfied - their ideal Republic would be the entire island. The British responded in June by passing the Ireland Act which both recognised the existance of the Republic of Ireland and gave Stormont the final say in any attempt to re-unify Ireland. The Anti-Partition League was disbanded in 1951 in the face of apathy from both sides of the border.

The 1950's were a time of quiet prosperity in Northern Ireland. The Welfare State had been introduced by the Labour government after the war and many poor people in Northern Ireland saw their standard of living rise dramatically. The Stormont government also took advantage of the war damage in Belfast to build better council housing. In 1946 the Health Service was made completely free and unemployment allowances were introduced in 1948. The Labour government also rapidly nationalised most of British infrastructure but Stormont was unhappy about the changes in Northern Ireland. The Unionists were generally right wing and did not like socialist policies. They even proposed forming an independent Northern Irish country until the Labour government agreed to fund the welfare state in Northern Ireland. However this increased Northern Ireland's economic dependance on Britain.

In 1951 the Conservatives regained power in Britain, and generally left Stormont to manage Northern Ireland. Problems existed in Northern Ireland at this time - 94% of the top 740 civil servant posts were held by Protestants (if equal opportunities were in force it should have been nearer 65%) and favouritism was often given to Protestants when council housing was given out. This policy persisted all through the 1950s and 1960s.

Times were harsher in the Republic. Jobs were few and far between and a general depression hung over the Irish economy. In 1959 de Valera became President and the new Taoiseach was Sean Lemass. He began a series of plans to rebuild the Irish economy, the first of which was designed to reconstruct the agricultural industry. Another plan gave foreign companies subsidies up to 2/3 of the cost to set up factories in the Republic. He also brought the Republic into the European Economic Community (EEC - which later expanded to become today's European Union) at the same time as the UK joined. The Irish economy grew faster than any predictions and exports had risen by 50% in the period from 1960 to 1966. Therefore Ireland entered the 1960s quite prosperous.

In 1956 the IRA regrouped and began a terrorist campaign in Northern Ireland. They blew up border posts and electricity installations. However the IRA did not have enough weapons, and they met nationalist apathy and even opposition in Northern Ireland and their campaign went out with a whimper in 1962. In the early 1960s it seemed as if nobody in either part of Ireland was really interested in reunification.

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