Poll: Should the money raised from the AIB sale be spent on infrastructure?

SOME OPPOSITION TDS have suggested in recent weeks that the government should use proceeds from AIB’s flotation to invest in infrastructural projects like housing and roads.

The bailed-out bank will return to the public markets in the coming months in what’s tipped to be the biggest flotation in Ireland in nearly two decades.

The sale is expected to raise up to €3 billion, which the government plans to use to reduce the national debt.

Gross national debt stood at 75% of the size of the economy by the end of 2016, or just over €200 billion.

Back in March of this year, Labour leader Brendan Howlin suggested that the billions raised through the AIB sale should instead be invested in public infrastructure.

The Wexford TD said selling the 25% stake in the company would only reduce the national debt by about 1.5% of Ireland’s GDP.

“The social good it could yield if invested in public infrastructure would be much greater,” he said at the time.

The Sunday Times reported that Fianna Fáil public expenditure spokesman Dara Calleary made a similar suggestion last month in a submission to the capital-spending review.

EU rules

However, EU fiscal rules brought in after the financial crisis state that governments must use windfall gains to bring the debt to GDP ratio down to 60% or lower – a target that Ireland is still well off.

Fine Gael MEP Brian Hayes said Ireland should resist the urge to “splurge this cash on short-term expenditure”, and said the country’s debt is “still too high and its cost remains a worrying and persistent issue”.

With that in mind, we’re asking Fora readers this week: Should money raised through AIB’s flotation be spent on infrastructure?