Proceeds of State assets sale to fund jobs
The Government is proposing to use funds realised from the sale of State assets to part-fund a new stimulus plan to boost economic growth.
Speaking this morning, Minister for Public Expenditure Brendan Howlin said the Government had tabled a proposal following talks this week with the European Investment Bank (EIB) for a new fund to leverage half of the funds it hopes to raise through the sale of assets for capital projects.
The Government aims to dispose of State assets worth €3 billion in the next two years. The original agreement with the EU-IMF troika allowed the State to keep just a third of total sales to spend on infrastructure and jobs.
The Government held talks with senior officials in the EIB over what resources would be available for "shovel-ready" projects, Mr Howlin told RTÉ’s Morning Ireland.
"What I put on the table now is to use 50 per cent of the total [sale of State] assets … to use for job creation and to use the balance of it also to set aside a fund that could leverage further money," he said.
“In essence, the totality of the money would in one shape or another be used to leverage immediate stimulus into the Irish economy and that's really important."
Mr Howlin said the Government was also planning to draw on funds from the National Pension Reserve Fund to use as a component part of the overall package.
“In the medium term, what we tabled for the first time in the last two days was to use a new fund to actually leverage further monies if you like a backstopper guarantor for money such as European Investment Bank money that we could avail of to create jobs in this economy.
"We have to see what the pensions industry will provide on the table. We have to see what specific amount of additional money the European Investment Bank will bring to the table but for example they have been very keen to support SMEs and they have upfront they have said they will give a package to Bank of Ireland and Anglo Irish of €250m each for support for SMEs. So, there's a range of different elements.”
Mr Howlin said the Government has decided what assets it would seek to sell.
“We have spent more than a year looking at all the State assets and strategically what we need to hold on to and were going to hold on to the distribution systems for electricity for gas, the gas interconnectors everything that's important to drive the economy.
“We can sell off the generating element of Bord Gáis Energy (BGE) that's what we've determined. Because we already have a very robust generating State company - the ESB. We need to have competition there," he said.
"One of the things we've done obviously is to discern what market appetite is there for those particular assets and we're assured by people who know - and we've sent them out to check - that there is a very robust appetite to have those particular assets and create new competition," Mr Howlin said.
"But I've said from the beginning, if we don't get a fair deal for the Irish taxpayer, we're not going to sell anything and that's the bottom line here."