Minister defends plan for sale of assets

ALL MODERN economies of the past 30 years have been moving infrastructural assets from the public to the private sector, Minister for Finance Michael Noonan has told the Dáil.

The Minister said the European authorities believed and were backed by “any economic theory you’d like to read” that “assets in private hands will be used more efficiently for the public good than assets in public hands, in general terms”.

Negotiations begin next week with the EU-International Monetary Fund on the use of funds from the sale of State assets and the troika regards the Government’s commitment to sell €2 billion worth of infrastructure as “a modest initiative but it has not nominated a higher figure”, Mr Noonan said. Whether the funding would be used to pay down Ireland’s debts or for investment in jobs would be “thrashed out” during the troika’s visit to Dublin from October 11th to 21st.

Earlier, Taoiseach Enda Kenny said it was “well known the troika will look for substantially more” than the €2 billion in State asset sales, and the McCarthy list was well above the €2 billion figure.

He rejected claims the establishment on a non-statutory basis of NewERA – the body responsible for the sale of State assets as a branch of the National Treasury Management Agency – represented a “fundamental change in approach to strategic State assets”, that Fine Gael outlined before the election.

Fianna Fáil leader Micheál Martin said the focus “will change to being on a short-term financial return as opposed to the long-term strategic interest of the State, which will become secondary”. The Taoiseach insisted, however, that there was no downgrading of the situation and there was no intention to “rush out to sell State assets”. NewERA “is not a new costly quango which is being set up to deal with this issue”.

Later, during finance questions, Richard Boyd Barrett (People Before Profit, Dún Laoghaire) suggested there was no specific requirement in the EU-IMF memorandum of understanding that Ireland should sell State assets. He claimed “the Government wants to do it but it wishes to put the blame on the EU-IMF for carrying through this deranged proposal to get rid of this country’s family silver”. He asked Mr Noonan whether €2 billion or €5 billion in State assets would be sold and suggested €2 billion would be used to “pay the bankers’ gambling debts” and the remainder would go to investment in jobs.

The Dún Laoghaire TD asked what justification could be given for the sale of State assets such as the ESB. “It is a drop in the ocean in terms of the debt.” He suggested the only rationale for selling such companies was “for corporate vultures to use the economic crisis” to “asset strip this country of vital State assets”.

Mr Noonan insisted, however, that the “European authorities and the IMF require the sale of State assets as part of the programme”. The Minister pointed to the difficulties in Greece and Portugal about the sale of assets.

When the troika insisted on a large privatisation programme in Greece “you could see the difficulty”. There was “no similar outcry in Portugal but there was a requirement for a very significant sale of state assets there also”.

The Government backed “the sale of non-strategic State assets” and the only figure on the table was the programme for government and the €2 billion commitment. He said “we know from informal suggestions” the troika saw the €2 billion as “modest”, but it had not suggested a higher figure. Mr Boyd Barrett asked for clarity about what a non-strategic State asset was. The Minister said “a minority shareholding in any State company is not strategic”.