Brendan Howlin (Wexford, Labour)

The only decision the Government has made on the sale of any State assets, having taken months to ask each line Department to look in detail at the McCarthy recommendations, and beyond it to their own view so we could have an agenda for rational decisions in the interests of the State, is to sell a minority share-holding in ESB. The second decision we made was to ask a structure we set up to look at the value of a range of other State assets. A difficulty for my Department when bringing proposals to Government was to get a true market value of anything. There is no point debating the sale of an asset if we did not have the true market value. That is what we are trying to discern before we decide on anything else.

The Government decision excluded the financial sector deleveraging. That will happen in any event. Under the decision we have already made in March to restructure the banks, we put in a considerable amount of capital, considerably less than we feared, thankfully, after the recapitalisation process. We have also required the banks to do an extraordinary amount of deleveraging. The Anglo Irish Bank portfolio in the United States to the value of $10 billion is being deleveraged. However, if the Deputy thinks we will get value for the bank shares the State owns right now, he would be wrong. We must establish the two pillar banks, AIB and Bank of Ireland.

It is good that Bank of Ireland managed to secure considerable private sector investment during the summer, which lessened the need for additional capital from the State, so it has reduced the overall take of share-holding the State might have had in the bank. In the longer term, it is the Government's intention to have private sector banks. Neither party in Government, no matter what their traditions are, is of the view that having a State-owned banking sector is the best way for the economy to move forward.

There are two parallel processes. First there is the requirement in the Government decision to sell some State assets up the value of €2 billion in accordance with the programme for Government. We must deal with the Troika and there will be questions about how we can use that money. The second is the process of restructuring the banking system, ensuring we have a functioning system that can lend into the economy and, in due course, get as much back for the State as possible when share values recover.

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