Thursday 8 December 2016

State to name assets worth €2bn in bailout sell-off deal

Published 15/02/2012 | 05:00

THE Government has promised to draw up a conclusive list of assets to target for privatisation within weeks.

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And it has reiterated that it plans to take a further €3.5bn out of the economy next year.

The list must be submitted to the IMF, the ECB and the European Commission within seven weeks for discussion.

The targets -- which could include parts of Bord Gais or Coillte -- will not necessarily be made public.

The Government must sell assets worth at least €2bn under the agreement between the State and our bailout partners.

The IMF and ECB said for the first time yesterday that some of the money may be used for job creation schemes, although most of it will be used to repay our burgeoning national debt.

While the Cabinet looked at a report on possible privatisation targets late last year, the IMF and ECB want detailed reports on the "policy, regulatory, legislative, corporate governance and financial issues that may need to be addressed".

The Government has committed to selling a stake in the ESB but will also have to sell other assets as well to reach the €2bn target.

While the IMF and ECB want to generate money from the sales, the organisations are also understood to be anxious to improve the quality and price of services as Irish consumers endure some of the most expensive electricity costs in Europe.

The Department of Transport said last week that there had been "strong interest" in the State's stake in Aer Lingus but added that a decision on whether to sell isn't likely for some time.

The IMF and ECB reiterated yesterday that the State will not be forced to sell assets at fire-sale prices but gave no indication of what the optimal price will be.

Squeeze

A credit squeeze in Europe and attempts by other governments to sell off assets mean that few companies are in a position to buy companies at present.

Yesterday's memorandum of understanding also contains the usual warning that further cuts may be necessary if the economy continued to contract this year after shrinking towards the end of last year.

Even without further cuts, the Government still plans to take another €1.25bn out of our pockets by forcing more people to pay income tax next year while also restructuring car tax. Cuts of €2.25bn are also coming down the tracks as welfare payments and the public sector pay bill are reduced.

Other sections of the sixth memorandum of understanding to be signed by the Government and the bailout partners since late 2010 include a promise to review the resources available to the Competition Authority and examine changes in the law to give the watchdog more power to compel organisations to obey rulings.

Irish Independent

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