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Andrew Lynch: Ireland for sale? Sure, selling the family silver is an option but it won't happen soon

ANOTHER day, another report. Colm McCarthy, a radical reforming economist or a heartless bean-counter depending on your point of view, has hung a giant 'For Sale' sign over Ireland's semi-State sector and produced a menu of possible profits.

Unfortunately, the new Government isn't feeling very hungry -- which is why this may end up as the latest document to get a polite hearing in the Department of Finance before being quietly put through the shredder.

The basic problem with the McCarthy Report is that its timing is all wrong. Given our dire economic plight, there is certainly no harm in taking a close look at the semi-state sector and estimating how much of it is worth flogging off.

Precious

But whether you're a left-winger who thinks the State should run everything or a right-winger who wants it all privatised, the harsh reality is that the market is currently at rock-bottom -- and the notion that €5bn is just there for the taking comes straight out of the Harry Potter guide to economics.

Even McCarthy himself admits that precious little of his report will be implemented in the short term. At his low-key press conference yesterday, he dampened down any speculation that the country might turn into a giant car-boot sale.

He recommends that smaller companies such as the National Stud and Bord na Mona should be sold to the highest bidder, but accepts that the 'Big Two' of the ESB and Bord Gais are core assets that must be kept for the time being.

The last time McCarthy gave us the benefit of his wisdom, it was the Bord Snip Nua report that suggested around €5.3bn in public spending cuts. This caused a huge fuss when it was published in July 2009, but almost two years later most of its recommendations are completely untouched.

As the economist would be the first to admit, he just does the sums -- it's up to the politicians to decide what can be achieved in the real world.

So what will the Government do? Any privatisation debate threatens to highlight the ideological divide at the heart of Enda Kenny's coalition, with Fine Gael instinctively in favour of it and Labour deeply suspicious.

The Programme for Government simply states that it will consider "up to €2bn" of semi-State organisations, which means that well over half of the McCarthy Report can be junked straight away.

Meanwhile, the unions have already made it clear that they will fight tooth and nail to resist any move that might put jobs at risk. Given that more public sector pay cuts are rumoured to be on the agenda for December's Budget, another showdown with Liberty Hall is the last thing this Government wants.

Ruthless

The only thing that might change this situation is the IMF suddenly deciding that Ireland's recovery strategy is not working and ordering Michael Noonan to raise some cash at all cost. While this is unlikely to happen today or tomorrow, nobody should doubt how ruthless Ajai 'Chopper' Chopra and his colleagues could be if they can't get the books to balance. Just ask Greece, where the government is being forced to sell off its beaches -- which is almost as bad as asking the Irish to put the Book Of Kells on eBay.

For now, the most valuable feature of the McCarthy Report is what it tells us about the outlandish salaries being paid to semi-State chief executives. As recently as 2009 the top 10 pulled in a cool €4.4m, with the ESB's Padraig McManus topping the list at €750,000 and the Dublin Airport Authority's Declan Collier trailing behind at €568,000.

While these people obviously exist in a different moral universe to our elite bankers, they apparently have a couple of things in common -- they get astronomical salaries no matter what kind of job they do and their legally binding contracts means there is precious little the Government can do about it.

Selling off the family silver is always an option, but in this case our national treasures are in need of some serious polishing before they can be put on the market. The McCarthy Report, meanwhile, is clearly destined for the remainder bin.


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