Madam, - Yet again we are seeing "Europe" being blamed for Fianna Fáil's own privatisation agenda. This false excuse is quoted in Arthur Beesley's report in your edition of July 5th.
A deliberately erroneous case is being made against State investment in Aer Lingus and therefore the retention of Aer Lingus in public ownership. It is deliberate because I do not believe that the Minister for Transport, with years of experience dealing with European competition issues and surrounded as he is by expert civil service advice, could be ignorant of the actual situation. It's also doubtful that the Aer Lingus management, which is seeking to buy out the company, does not know the real legal situation.
To put it plainly, neither European Union treaties nor European competition law preclude the Irish State as a shareholder from investing in Aer Lingus. European treaties are entirely neutral on public versus private ownership (Art. 295 of the EC Treaty).
As regards European competition law, while it applies very strict criteria to state aid for companies, it does not disallow member-state investment in a state-owned enterprise. It is patently obvious to all but the wilfully blind that a capital investment by the Irish State in Aer Lingus to renew the fleet and thus maintain or increase profits would be guaranteed not to fall foul of the state aid provisions of the EU treaties.
In order to kill off the Government's false line of argument I have now formally asked the Commission to confirm that there is no incompatibility between EU competition rules and state investment in state companies such as Aer Lingus.
I have no doubt that Mr Brennan's privatisation agenda is ideologically driven and covers all the State companies for which he has responsibility. Even so, if the Minister has an honestly held conviction that privatisation should happen, let us hear his commercial and strategic rationale for it. We deserve honesty and frankness on such a critical issue and less muddying of the waters.
The Aer Lingus management buy-out proposal, apparently backed by so-called "venture capital" interests, is a gambit, which, if successful, will make millionaires of a few people. I have no doubt that it will be at the expense of the Irish taxpayer whose investment in Aer Lingus has ensured its survival and success since its inception. It can of course be argued that keeping it in State ownership could also cost the taxpayer. The questions we need to ask, then, is: which option is in our best long-term economic and strategic interest, and are there other viable options?
We should also consider what we could learn from previous privatisations - for instance, from the Telecom Éireann débâcle, where venture capitalists made a killing on the pretext that privatisation would ensure the development of a first-class telecommunications infrastructure. Yet despite all the lavish promises, the taxpayer is again funding the extension of telecom infrastructure around the country.
If Fianna Fáil privatises Aer Lingus, and breaks up Aer Rianta, we will end up with strategic decisions which affect the life blood of this island economy being made in the boardrooms of transnational corporations. We know from bitter experience that their only concern is the bottom line and that venture capital investment is primarily concerned with short-term gain, not long-term investment in national infrastructure.
We need a full public debate on all the issues that this proposal gives rise to. We need amongst other things a full public accounting of the assets of Aer Lingus and Aer Rianta. We need to be told what the implications will be for public policy if we no longer own key national and regional airports, or a national flag carrier. What for instance will happen to Shannon Airport? To Cork Airport? To Dublin Airport?
Will we, for instance, have to buy back land at Dublin Airport in a few years' time, at inflated prices, to build a rail link to it? What if another aviation crisis hits as a result of an atrocity involving aircraft? Who will then service our peripheral Irish economy? While there are technical and commercial and employment implications to be considered there are also key political and strategic choices to be made. We must not leave these matters to company take-over experts, as proposed by Mr Brennan.
Nor should we leave the burden of these decisions to the trade union movement. The unions have a legitimate role in ensuring their members' employment rights and conditions are protected. Workers must be heard and must be central to any decisions about their future. But the Minister's proposals have much wider public policy implications for Irish society - implications which must be fully debated by the Dáil and Seanad in the autumn.
It is essential, too, that the public is given time and opportunity to contribute to this debate based on the publication of all the options and their implications. Otherwise we must assume that Fianna Fáil and the PDs have learned nothing from their recent electoral débâcle. - Yours, etc.,
PROINSIAS DE ROSSA, MEP, European Parliament Offices, Dublin 2.