Coalition: Public debt still a challenge

Finance Minister Michael Noonan
Finance Minister Michael Noonan

Public debt is still a major challenge and will remain so into the future, Government has warned.

It came ahead of Finance Minister Michael Noonan announcing his intention to sell off 25% of the State’s stake in AIB and intends to pump the money earned from the flotation into reducing the national debt.

The Department of Finance is due to publish a Public Debt Report next week, which will highlight what the country still owes and is expected to stress the need for prudent spending.

However, despite Government warnings that policy priority must still be placed on reducing public debt, the plans to go ahead with the sale have been criticised.

The Labour party had already argued that the AIB sale should be postponed, and called on the Government to instead use the proceeds of the sale on improving the healthcare system.

Mr Howlin said: “Despite the decision of the Dáil to postpone the sale of AIB, the Cabinet is being briefed on the plans of the Minister for Finance to ignore that democratic decision and proceed with a sale of 25% of the bank that was bailed out with the people’s savings in the National Pension Reserve Fund.”

Mr Howlin added that the proceeds of sale of 25% of AIB would pay down just over 1% of our national debt.

At 9pm last night Mr Noonan decided that “the strong progress made by AIB and current market conditions” meant it was right time to float the shares.

Meanwhile many ministers expressed concern around how the Office of the Director of Corporate Enforcement (ODCE).

It comes after the trial of former Anglo Irish Bank chairman Sean FitzPatrick collapsed last week when a judge fund that the investigation carried out by the ODCE fell short of an unbiased, impartial and balanced investigation that any accused is entitled to.

Judge John Aylmer found that witnesses had been coached and evidence was shredded by the ODCE.

Jobs Minister Mary Mitchell O’Connor brought a memo on the ODCE to Cabinet yesterday and there was a lengthy discussion on the matter during which a number of ministers questioned the office’s fitness for purpose and raised its failure to prosecute instances of white-collar crime.

A spokesman for the Taoiseach said: “It is clear that remedial action is required.”

Ms Mitchell O’Connor expects a report back by on the fall-out of the collapse of the FitzPatrick trial by June 23.

Cabinet was also told the Independent TD Kevin ‘Boxer’ Moran will take over from Sean Canney as Minister of State for the OPW from Saturday.

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