Enda Kenny (Mayo, Fine Gael) | Oireachtas source

I thank the Deputy for his comments on the rescue of Rescue 116 and those who lost their lives.

With regard to the other issue he raised, this is a financial transaction. The paper asset shares are being swapped for a cash injection. That will go towards debt reduction, as the Minister for Finance has made clear. It is also a test of the overall examination of value of AIB. The Government is looking at alternative ways of raising other funding. One of those follows the opening of the European Investment Bank office here in Dublin, which has potential for serious lending of long term, low-interest credit for infrastructure facilities, where a stream of income would be available to repay those loans, whether from tolled motorways, developments of ports or areas of transport like light rail, such as metros or the Luas. The Minister for Public Expenditure and Reform is now conducting a review of the capital programme in partnership with that. The Government allocated almost €5 billion to the Minister for Housing, Planning, Community and Local Government to provide houses across a range of areas and this has been backed up by a suite of changes that have been made by the Government to incentivise both local authorities and housing agencies and provide new impetus for availability of sites and so on. I hope that those three aspects - the review of the capital programme, the opportunity that is now being explored through the European Investment Bank and the capacity for further lending into the system - will bring forward new opportunities for investment here.

The Minister has said that, based on the advice he has received, an initial public offering, IPO, is the best route to recoup the State's investment in AIB and the key objective is to maximise the proceeds that we can recover over time. The State invested €20.8 billion in AIB through a range of instruments during the financial crisis, and has since recovered €6.6 billion through capital repayments, interest income and fees, and still owns about 99.9% of the ordinary share capital. The primary objective of the Minister and of the Government is to recover all of this investment from AIB. We believe that this is a realistic objective over the medium to long term. There are no changes in the Stability and Growth Pact rules here. It is a transfer of these paper shares for cash, which will go towards debt reduction.

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