Thursday, 18 May 2017
Sale of State Assets
I will make two points. In terms of the general government debt balance under EUROSTAT rules, selling AIB shares would not make a difference because we hold the asset in shares. When one sells it, one holds it in cash, but it has the same value and it is the same amount. It would not give us the freedom to spend under EUROSTAT rules. Therefore, if we were to spend, we would be in breach of the fiscal rules in general. It is due to the fact that this type of disposal is clarified as a financial transaction, whereas essentially it is the exchange of an asset in one form such as shares, equities and loans for another, namely, cash. Consequently, the shareholding in AIB would not count as general government revenue. When it comes to investing in infrastructure, it is a not a shortage of cash that is inhibiting additional investment in infrastructure but the fact that we have reached the ceiling under the fiscal rules. The issue is our capacity legally to spend additional moneys or capital, not the availability of cash. Therefore, the sale of AIB is irrelevant to the argument. We can borrow money very cheaply on any day of the week from the markets through the National Treasury Management Agency, NTMA, but we are not allowed to spend it if we have already used up the fiscal space available. We are exploring the possibility of funding quite a lot of infrastructure off balance sheet. We are in discussions with the European Investment Bank to see if we can achieve this objective.