Joined up thinking for the Irish Left
New Books Worth Reading Mon Sep 19, 2016 23:25 | Seán Sheehan
13 Billion ? Lucky for some? Mon Sep 05, 2016 13:04 | Tony Phillips
Rebuilding Ireland: Long on Promise, Short on Detail Mon Aug 29, 2016 22:20 | Eoin O'Mahony
Brexit and Other Issues: Comments on the Current Situation Mon Aug 29, 2016 21:52 | Brendan Young
Bin Charges: From Private Circus to Public Service Tue Jun 21, 2016 12:38 | Michael Taft
Irish Left Review >>
The Case of Comrade Dallas Mon Mar 19, 2018 19:44 | Slyvia Smith
Review: Do Religions Evolve? Mon Aug 14, 2017 19:54 | Dara McHugh
Fake News: The Epistemology of Media Wed Jun 07, 2017 11:52 | Gavin Mendel-Gleason
Officials and Provisionals Sat Apr 01, 2017 22:54 | James O'Brien
Interview with Cathal Goulding Mon Dec 26, 2016 17:11 | Cathal Goulding
Spirit of Contradiction >>
Interested in maladministration. Estd. 2005
Elaine Byrne: Not speaking full truth to power
Israel/Ireland: Corruption comparison Anthony
Irish cowboy town and fake regulatory agencies Anthony
Elaine Byrne: Failing to join up the dots on state corruption Anthony
No law for the powerful, strict enforcement for decent citizens Anthony
Public Inquiry >>
Farewell from NWL Sun May 19, 2013 14:00 | namawinelake
Happy 70th Birthday, Michael Sun May 19, 2013 14:00 | namawinelake
Of the Week? Sat May 18, 2013 00:02 | namawinelake
Noonan denies IBRC legal fees loan approval to Paddy McKillen was in breach of E... Fri May 17, 2013 14:23 | namawinelake
Gayle Killilea Dunne asks to be added as notice party in Sean Dunne?s bankruptcy Fri May 17, 2013 12:30 | namawinelake
NAMA Wine Lake >>
Proceeds of AIB shares should be for public investment – TASC economist
economics and finance |
Friday June 02, 2017 18:34 by 1 of indy - Think-tank for Action on Social Change
Press Release - TASC - 30th May 2017
reland must assert its sovereignty and invest the proceeds of the AIB shares in public infrastructure, according to leading economist, Paul Sweeney of TASC.
The main reason for investing this capital in Ireland, Mr Sweeney said, is that it generates bigger returns than the savings on the interest on the national debt. Furthermore, the extraordinarily low level of public investment is manifested in the housing crisis and hospital overcrowding.
The government has already received €6.2 billion from AIB from capital reorganisation, all of which has been used to repay the national debt. “It is now time that the next tranche of capital from AIB is used to invest in capital infrastructure,” said Mr Sweeney.
TASC first made the recommendation that the capital from the first share offer should be invested rather than used to repay the debt in a major investment report, “A Time for Ambition”, published in December 2015. (See https://www.tasc.ie/publications/a-time-for-ambition-en...h-in/ )
The report pointed out that in recent years public investment in Ireland fell to the lowest level since records began. The level of investment was so low one year that it did not even cover depreciation.
“This is very bad economics,” stated Mr Sweeney. “Most economists and international agencies like the IMF agree that public investment in infrastructure can repay substantially more in real returns to governments than the cost of interest. That is one reason for more public investment, with others being that we will have the use of assets and that it will increase employment, particularly in construction. Also such low public investment is damaging future economic development.”
Last month the government borrowed €500 million, the interest was minus 0.42% and this was almost three times oversubscribed. The average interest rate on all the debt was 2.3% last year – and it is lower today.
Mr Sweeney also was critical of the “bogeyman” who asserted that that the EU is stopping the government from using some of the AIB proceeds to invest in Ireland.
“It suits the suits who want to repay debt to say this. Ideological though the Commission is, it cannot really stop a sovereign government from investing its own capital in its own country. Furthermore, the EU has clarified the rules ( http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELE...R1185 ) on the Stability and Growth Pact in which indicates a more relaxed approach especially for an economy which is performing well like Ireland.
“In the longer term, the government should also retain a decisive shareholding in AIB, one of Ireland’s leading retail banks. Banks are too important to be left to bankers to run or ruin,” Mr Sweeney concluded.