Sinn Féin MEP Martina Anderson said all avenues for cross-border co-operation must be explored.
Speaking at a conference to launch a tool-kit for cross-border co-operation at the European Parliament, Ms Anderson said; “Following partition we went from a single unit to two jurisdictions, two currencies and three administrations in Belfast, Dublin and London.
“Research shows that because Ireland’s natural hinterland was divided, communities living along the border are twice as likely to suffer from poverty.
“Despite having duplication of statutory departments and agencies across the island, our economies are interlinked and interdependent.
“Huge amounts of money, time and energy are expended as a result of this duplication. This is not in the best interests of citizens whether they live in Derry or Cork.
“There is no advantage for an island of 6.4 million people on the edge of Europe having separate tax regimes, legal and regulatory systems, different economic development agencies and competing investment policies.
“Co-operation is an absolute necessity for businesses and communities across the island.
“Europe can play a key role in building capacity to deliver cross-border co-operation across a range of sectors.”