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Ireland: selling the family silver

Ireland prepares for a fire sale of national assets to pay debts.

It includes 28 semi-state bodies, commercial enterprises owned outright or controlled through majority shareholding by the Irish government. Some are national icons, like RTE, the state radio and television station. Others are more mundane concerns like Dublin’s unionized bus service.

There will be a furious political and popular response when the “for sale” signs go up. A Sunday Tribune investigation of previous government sell-offs shows that more than 8,000 workers were made redundant once their companies fell into private hands.

Economist Jim Power pointed out that “given the massive failures in the private sector, particularly in the banks, it cannot be taken for granted that the private sector will do any better.”

Irish people remember the debacle over the 1998 sale of the national telephone company, Eircom. Tens of thousands of citizens who — on the urging of the government — took out shares lost out as the stock market value fell. Moreover, the number of employees dropped from 11,000 to 6,000, its nationwide broadband rollout was patchy, many of its assets were stripped and it now has debts of 3 billion euros ($3.9 billion).

A disincentive for prospective international buyers is that some semi-state bodies, relics of a pre-modern Ireland, with guaranteed employment and pension plans, are heavily in debt. Dublin Airport Authority which has borrowings of over 1 billion euros ($1.3 billion).

Apart from assets such as the Electricity Supply Board, worth an estimated 7 billion euros ($9.1 billion), rich pickings from among the family treasures are actually quite slim. The problem with a national fire sale of Irish assets is not so much what it might raise, or even whether it is a good idea, but whether anyone will turn up.