SELLING AIB NOW IS AN ACT OF PURE FOLLY

09 May 2017

Speaking on our motion on the sale of AIB, Labour Party spokesperson on Finance, Joan Burton TD has said it is time for Government to reconsider the sale of a 25% stake in AIB, saying that it is just pure folly at this time.

Deputy Burton said:

“Ireland will sell off 25% of a bank that has cost the taxpayer tens of billions of euro for something in the region of €3 Billion, and we won’t be able to give the people of Ireland any dividend from the cash raised from the sale.

“For months, I have been making the case for changes to the Stability and Growth Pact in order to allow for greater investment in public infrastructure. Unfortunately, our Government has so far utterly failed to push this idea at a European level. The result is that none of the proceeds from any sale of AIB can be invested into building houses, hospitals or schools.

“When this happens, we should bear in mind that AIB has been rescued 3 times by the people of Ireland.

“The original policy of selling off our holding in AIB was based on a need to reduce our debt but that situation has changed dramatically – Ireland’s net debt has already fallen and will continue to fall as the economy performs well.

“Diverting everything we get from selling a quarter of AIB would only reduce our debt by about 1% to 1.5% of GDP.

“Meanwhile, everyone recognises that Ireland is in dire need of additional spending on housing, hospitals, schools and public transport.

“The social case for greater investment in housing and hospitals is clear and the economic case for investment in transport and communications infrastructure equally so – particularly with Brexit on the horizon.

“Michael Noonan is foolishly proposing to press ahead with the sale of 25% of our shares in AIB but he tells us that not one cent of this can be invested in improving our infrastructure.

“The people who will benefit from this sale are the financial advisers who stand to earn €40 million from this action. The Irish people will see no such benefit.

“Public investment has the potential to yield great long term benefits for Ireland and also to give our citizens some concrete advantage from the vast sums spent on the bank bailouts.

“The social good it could yield if invested in public infrastructure would be much greater.

“Senior executives and stockbrokers may want a 25% stake in the AIB sold ASAP, but the wider national interest requires a more considered strategy.

“It’s a case of here we go again – a Minister anxious to boost the feel good factor. Harold McMillan’s “You’ve never had it so good” seems to be his maxim.

“Minister Noonan would be well advised not to repeat the mistakes of Mr Ahern’s government, electioneering and encouraging people with a spare €10k in savings to invest in shares. We all remember the consequences of the Eircom floatation and how smaller investors were burnt.

“A quick sale of the State’s share in the AIB does not do justice to Ireland’s chronic infrastructure needs.”

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