The Minister for Finance Michael Noonan has confirmed to the Dáil that there was no commitment in the original EU/IMF Memorandum of Understanding to commit to the sale of state assets, an accusation Ministers and Government back-benchers have been peddling since it emerged the Government decided to sell a minority stake in the ESB.

During questioning in the Dáil this afternoon Minister Noonan told Fianna Fáil Finance spokesman Michael McGrath that ‘no figure was included in the original memorandum of understanding.  We included a figure of €2 billion in this regard in the programme for Government and we intend to realise that.  However, we are obliged to negotiate with the troika in respect of what we may do with the proceeds of the sale of State assets.’

Deputy McGrath said: ‘This is absolute confirmation that the sale of state assets to the tune of €2 billion is entirely an initiative of the Fine Gael / Labour Government and not a commitment entered into by the previous government.’

“In fact, when I told the Minister that it was something being blamed on the previous Government he responded: ‘I do not believe there is an issue of blame.  I am in favour of and welcome the sale of State assets.  There is no blame attached.’

Deputy McGrath stated: ‘This government is going to have to stand over its own decisions.  A significant strategic decision has been taken to shift the focus of our state assets away from being publicly owned assets delivering essential services to Irish citizens.  This change is being made without any debate or real understanding of its significance, and is clearly being driven by FG ideology.

“Minister Noonan’s clarity on his Government’s decision to raise €2 billion by selling off state assets is in marked contrast to the bluff and bluster of his Labour Party colleagues who have sought to confuse, misinform and misdirect the public and their own voters on this key issue.”

“In addition, it was the FG/Lab Government that committed last April to the troika that the proceeds from the sale of State assets would be used to pay down debt. The Government has now said it wishes to renegotiate this and has conveniently claimed that it was Fianna Fáil who agreed it in the first place. The truth is that the Government allowed this commitment to slip through in April and is now seeking to renegotiate a commitment itself agreed to a short few months ago.”

 

Below is a transcript from Priority Questions, Wednesday afternoon –

   Deputy Michael Noonan: We are not resiling in respect of any matter.  No figure was included in the original memorandum of understanding.  We included a figure of €2 billion in this regard in the programme for Government and we intend to realise that.  However, we are obliged to negotiate with the troika in respect of what we may do with the proceeds of the sale of State assets.

   Deputy Michael McGrath: The Minister should stop blaming us for his being obliged to raise that amount.

   Deputy Michael Noonan: I do not believe there is an issue of blame.  I am in favour of and welcome the sale of State assets.  There is no blame attached.

   Deputy Michael McGrath: In that event, the Minister should inform his colleagues to stop blaming the troika.

 

What the EU/IMF deal and reviews have actually said on the issue:

 

1.   Memorandum of Understanding, December 2010 (FF/Green Government)

Specifically, we will continue to press ahead with other structural reform as set out in the Memorandum of Understanding on specific economic policy conditionality:

Building on the forthcoming report of the Review Group on State Assets & Liabilities the government will undertake an independent assessment of the electricity and gas sectors with a view to enhancing their efficiency. State authorities will consult with the Commission Services on the results of this assessment with a view to setting appropriate targets for the possible privatisation of state-owned assets.

Structural reforms

To assist in financing need and to increase competition

Building on the forthcoming report of the Review Group on State Assets & Liabilities the government will undertake an independent assessment of the electricity and gas sectors.  State authorities will consult with the Commission Services on the results of this assessment with a view to setting appropriate targets.

 

2.   Memorandum of Understanding, April 2011 (FG/Lab Government)

Product and Labour Market Reforms

It is important that we make effective use of our state assets and, where appropriate, dispose of them to help reduce our government debt. We are committed to studying the recommendations of the just-concluded Review of State Assets and Liabilities, with a view to raising the efficiency of commercial semi-state bodies via governance reforms and cost-control, and a phased privatisation of selected enterprises supported by associated development of the regulatory system as appropriate.

Structural fiscal reforms

To further reform key sectors of the economy

The Government is due to consider a potential programme of asset disposals based on the Programme for Government and the Review Group on State Assets and Liabilities. The Government will discuss its plans with the European Commission, the IMF and the ECB when it has finalised its response to the Review.

 

3.   Memorandum of Understanding, July 2011 (FG/Lab Government)

Structural fiscal reforms

To further reform key sectors of the economy

Government will consider options for an ambitious programme of asset disposals, based on the Programme for Government and the report of the Review Group on State Assets and Liabilities. Government will prepare a draft programme of asset disposals in this context and discuss it with the staff of the European Commission, the IMF and the ECB by end-December 2011 in advance of taking final decisions on the programme to be pursued. The draft programme will include the identification of the potential assets to be disposed, any necessary regulatory changes and a timetable for implementation.

Fiscal Policies

We are committed to an ambitious programme of state asset disposals. We will consider options for asset disposals, based on the Programme for Government and the report of the Review Group on State Assets and Liabilities. We will prepare a draft programme of asset disposals in this context and discuss it with the staff of the European Commission, the IMF and the ECB by end December 2011 in advance of taking final decisions on the programme to be pursued. The draft programme will include the identification of the potential assets for disposal, any necessary regulatory changes, and a timetable for implementation.