Pat rabbitte 2059

More power to the private sector

[caption id="attachment_66951" align="aligncenter" width="600" caption="Pat Rabbitte outside the Dáil last week."]

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The Irish government will grant more power to the private sector - literally. The government announced last week that it was considering privatizing a portion of the Electricity Supply Board (ESB), which has a monopoly on the sale of electric power in the Republic.

The money raised by a partial sale would be used against debts attached to the EU/IMF bailout.

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According to the Irish Examiner, communications minister Pat Rabbitte said the government had signed off on the plan to sell off a minority stake in the semi-state company.

But facing criticisms that the move was a retrograde step, Mr. Rabbitte said the electricity company would largely remain in state hands, the paper reported._

"There is no question of this government handing over control," Minister Rabbitte said.

He added that the size of the stake to be put up for sale has yet to be decided and would be considered by a group of officials from the departments of communications, energy and natural resources, public expenditure and reform, finance and the National Treasury Management Agency.

This group will report back to the government by the end of November.

According to the Examiner report, under the terms of the €85 billion EU/IMF bailout deal, the government must consider the privatization of state assets.

Rabbitte said the government was trying to get the economy back on track.

"I find myself in a position that I don't want to be in, but I acknowledge that the survival of the viability of this economy is at risk, and that we have to make moves to ensure economic recovery and get people back to work," he said.

The Fine Gael/Labour coalition's program for government document states that up to €2 billion has to be raised by the sale of non-strategic state assets, this drawing from the recommendations of a review by economist Colm McCarthy. McCarthy recommended the break-up and sale of both ESB and Bord Gáis, the gas national utility.

McCarthy called for the ESB's electricity generation, supply and distribution businesses to be sold, but said the actual national grid should be retained in state ownership.

Successive Irish government have retained full ownership or large stakes in utilities and other companies including Aer Lingus, once the "national airline."

The current Irish government still has a 25 percent stake in Aer Lingus but as with the ESB, the government, represented in this case by transport minister Leo Varadkar, has lately been stating that there no longer a strategic case for the government holding on to the share.

What's holding a government sale back more than anything is the current low share price of Aer Lingus. That said, there are not a few voices in Ireland in expressing concern over the transfer of once publicly held assets into private hands - hands which may not even be Irish.