Belfast Telegraph

Ireland's dilemma over what to sell to raise essential cash

By Brendan Keenan

They call it "selling the family silver", but there is not much that gleams in the state assets covered in the McCarthy Report.

At the very least, the residue of decades of comfortable monopoly would have to be scraped off most of the state companies before there is any prospect of selling them. How that could be done without enormous industrial unrest and politi- cal controversy is anyone's guess.

In fact, the task given to the group by former Finance Minister Brian Lenihan was not simply to advise on the sale of state assets. It was to report on how the assets "could be better deployed or disposed of to support econ- omic recovery" - a much wider remit.

Yet, perhaps surprisingly for a report with the name Colm McCarthy attached, it is cautious about the question of actual sales. It warns against selling cheaply.

That will produce a few ironic chuckles in AIB and Bank of Ireland. They were forced to sell what really was family silver, especially AIB's profitable Polish bank, to reduce their debt.

That is a standard demand of creditors when a company gets into trouble. They usually want whatever they can get now, rather than being prepared to wait for better times.

The Irish government is unlikely to play that kind of hardball with state com-panies. Especially not one with the Labour Party in it. But the Irish government is not the only arbiter.

The European Central Bank has forced the pace on asset disposals. Will the EU and IMF do the same on state assets?

The Coalition has suggested it might raise €2bn (£1.76bn) by having sales. That was interpreted as meaning fairly limited disposals. There could, however, be political pressure for more from the EU. Greece has been obliged to increase the amount due to be raised from public assets.

Ireland may not have much to sell, but it may be expected to show willing, especially since it is already accused of "putting nothing on the table" after digging in on the corporation tax rate.

If assets are to be sold, Ireland, can learn from their experiences. Unfortunately, we are most familiar with the UK, whereas countries like the Netherlands and Sweden often have better examples to offer.

Perhaps the most that can be expected in the end is that, with the threat of priva-tisation, the state will be able to put more of a commercial squeeze on its commercial sector than it has in the past.