€3bn from sale of state assets to fund employment

All €3 billion raised from the sale of state assets will be used to fund job creation following extensive negotiations with the Troika, said Reform Minister Brendan Howlin.

Initially, the EU and IMF wanted the country to sell €5bn worth of assets, such as Bord Gáis and Aer Lingus, and use all the money to pay down the country’s €170bn debt. This was later reduced to€3bn,with 66% to go towards the debt.

Mr Howlin said he received a very positive response from the European Investment Bank to engage with the new approach and support projects funded by public private partnerships.

He expected that Bord Gáis’s energy generation section would be the first of the state assets to go on sale next year and it would be followed by other asset sales. Half of the money raised will go directly to job creation while the balance will be put into a support account to leverage money from others, including the European Investment Bank.

If the Government was to go guarantor for funds from the EIB, the money would be added to Ireland’s already historically high debt. But if the money from the asset sales is used instead, the loans raised using it would not be added to Ireland’s debt.

Tourism and Transport Minister Leo Varadkar welcomed that the full amount raised from the sale of assets would go into job creating measures.

“It was to be up to a third, but following good progress it is better than that and, in fact, the whole lot will be used — half directly and the other half to kick-start a fund that will be able to kick-start the economy,” he said.

Eventually the fund would be used to pay down the debt, but it would not be for a very long time, he said.

“It’s just what we want, a stimulus that does not add to our debt, a lot of the plans suggested would have added to the debt.”

This is one of a number of announcements the Government hopes to make about ways to invest billions of euro into growth and job generating measures over the next months. It is hoped that much of it will get the go-ahead also next month when EU leaders meet in Brussels to approve growth measures to accompany the fiscal compact.