�ire�s economic woes contributed to the defeat of Fianna F�il and de Valera in the 1948 national election. John Aloysius Costello became prime minister, leading a coalition of six parties, the chief of which was Fine Gael. He called for legislation to reduce inflation and the cost of living, lower taxes, expand industrial production, and establish closer commercial relations with the United Kingdom. To the dismay of British authorities, Costello also announced that he would lead a campaign for Ireland�s full independence. In November 1948 Costello introduced the Republic of Ireland Bill in the D�il, and it was passed the following month.

On Easter Monday, April 18, 1949, the anniversary of the Easter Rebellion, �ire declared itself the Republic of Ireland, completely independent of the British crown and no longer a member of the Commonwealth of Nations. In May the British Parliament recognized the status of the Irish Republic but declared that the six counties of Northern Ireland would not be severed from the United Kingdom without the assent of the parliament in Northern Ireland.

The transition from �ire to the Republic of Ireland was of chiefly symbolic significance, marking the achievement of a goal sought by Irish nationalists for generations. The United Kingdom allowed Ireland to retain the economic benefits of Commonwealth membership, and it extended to Irish citizens living in the United Kingdom the same rights as British citizens. Ireland granted British citizens residing in the republic similar benefits. Nevertheless, the continued partition of Ireland strained the republic�s relations with the United Kingdom. As a protest against partition, the republic declined to join the North Atlantic Treaty Organization (NATO), since this would have entailed entering into a military alliance with the United Kingdom.

In the republic�s first national election in 1951, de Valera returned as prime minister. De Valera�s willingness to accept an independent Irish Republic that did not include the six counties of Northern Ireland provoked renewed protests from the IRA. During the 1950s the IRA organized armed raids and ambushes along the border of Northern Ireland. De Valera was forced to take repressive action against the IRA while simultaneously protesting the continuation of partition.

More pressing than the question of partition, however, were the social and economic problems that beset the republic. Particularly serious was the constant loss of young people, who continued to leave the country by the tens of thousands annually in search of greater opportunities in the United Kingdom and the United States. In an effort to assist the agricultural population, and to stem the flow of farm workers to the cities and foreign countries, the de Valera government began an ambitious program of rural electrification and promoted new measures to stimulate local industry.