It's too soon to sell AIB stake, says Fianna Fail
Fianna Fail has warned it is too soon to sell a stake in AIB, after the Irish Independent revealed yesterday that the privatisation process is picking up momentum.
Fianna Fail finance spokesman Michael McGrath TD said that pursuing a partial sale of the nationalised bank was a sign that Finance Minister Michael Noonan has "thrown in the towel" with regard to efforts to secure finance from the European Stability Mechanism (ESM) to compensate for money pumped into the bank by taxpayers.
Competition concerns caused by the exit of foreign banks should be addressed ahead of an AIB sale, he said.
The Irish Independent reported that around €3.5bn could be raised next year from the sale of a 25pc stake in the bank on the stock market.
A panel of banks and brokers who will advise on the privatisation of all banks taken over during the crisis is due to be named in the coming 10 days.
Deputy Michael McGrath said the question of how money from the sale is to be spent needs to be resolved.
"The shares in AIB are held through the National Pension Reserve Fund which was set up to meet the pension liabilities of the state from 2025," he said.
"AIB cannot be treated as a political slush fund to provide cash for the minister to go on a spending spree in advance of the general election.
"We need reassurance that the proceeds from any sale of AIB will be used in the interests of citizens and not the short term political considerations of Fine Gael and Labour."
However it is understood that the cash raised will go towards paying off a share of the national debt.
That will help reduce the State's annual interest bill, which is expected to be €8bn this year and of which €1.6bn is charged for money borrowed to pump into the banks.