For anybody out of work, that will be the crucial question arising from the announcement on state asset sales. Unfortunately, there is no clear answer.
The Government is aiming for about €3bn of sales, and has secured the agreement of the troika to use €1bn of that sum for job-creation programmes.
“This is to leverage money to invest in jobs” was how Public Expenditure Minister Brendan Howlin summarised the planned disposals. But with the Taoiseach declaring that no sales are likely before next year, it could be quite a while before the Government has any proceeds to throw at jobs.
While the Government has rightly insisted it will not engage in a “fire-sale” of assets, it means that the promised jobs investment could take years to materialise. The timeframe is not the only problem.
The list of disposable assets is a very short one — a division of Bord Gáis, a bit of ESB’s power generation capacity, some of Coillte’s assets, and the remaining stake in Aer Lingus.
When economist Colm McCarthy and colleagues compiled a report on state assets and liabilities last year, they put a value of about €8.3bn on the entire semi-state sector. They put a value of circa €5bn on the assets they recommended selling — but that was a long list, involving bits or all of the ESB, Bord Gáis, ports, Coillte, Bord na Mona, the Irish Aviation Authority, CIÉ, the National Stud, and Bord na gCon.
By contrast, the Government’s list is very short. So, achieving €3bn may be a tall order. And if the Government doesn’t hit €3bn, there will be less to invest in jobs. The €1bn investment sum targeted could suddenly diminish.
That would make the politics of the asset disposal very difficult for the Government, especially Labour.
For now, it can argue that it has limited the list of disposals and that there will be no fire-sales, with ministers intent on not selling until the price is right.
But they can’t wait forever — the most recent revised memorandum of understanding agreed with the EC-ECB-IMF troika gives the coalition until the summer of 2013 to report “on the quantum of the proceeds of any realised asset sales to date”.
In other words, by then, the Government will be expected to have begun the sales process. And if the price still isn’t right by that stage, the Coalition will have a problem.
On one hand, it may be able to continue arguing with the troika that it makes no sense to sell assets when they are under-valued. But on the other hand, the bailout programme itself will be within six months of conclusion, and it’s entirely feasible that the Government will be seeking to negotiate a successor.
That being the case, it may have to cede to troika demands rather than attempt to fob them off — and so sell the assets for whatever price they can achieve rather than a truly good price.
But for now, the Coalition has a little time to tease such issues out. It will also have to tease out ways of ensuring there is no repeat of the Telecom Éireann privatisation debacle if and when assets are sold.
The challenge now for the Cabinet will not just be to remember the errors of recent history. It will be to avoid repeating them.