The Dáil has elected to keep the state's AIB shares - because the government forgot to vote

But the Department of Finance says the €3bn sale will still go ahead as planned.

By Fora Staff

THE GOVERNMENT SAYS the planned sale of a partial stake in AIB will go ahead as planned – despite a successful push in the Dáil for the €3 billion deal to be postponed.

A Labour motion to prevent 25% of the bank’s shares being put on the market was passed earlier today.

The government’s former coalition partner has been pushing for the share sale to be stalled until EU fiscal rules are changed to allow the state to spend the proceeds on infrastructure.

As it stands, the Irish government plans to use the proceeds of the share sale – which would return part of the €20.7 billion put into the bank when it was nationalised – to pay down the national debt.

Around €6.6 billion of the bank’s bailout has already been recouped through various payments. The government was intending to launch the share sale as early as mid-this year, with the timing decision expected to be announced shortly.

But, as rival campaigns for the Fine Gael leadership get under way today, it seems the government forgot all about Labour’s plan.

“Remarkable way for it to happen … with government TDs forgetting to take their own side,” party leader Brendan Howlin wrote on Twitter.

“Dáil passes motion not to sell AIB until fiscal rules are renegotiated. Government forgets to call vote (as it was) distracted by the leadership race,” Sinn Féin’s finance spokesperson Pearse Doherty also wrote.

Source: Brendan Howlin/Twitter

Sale schedule

Finance Minister Michael Noonan, who announced his retirement today following Taoiseach Enda Kenny’s decision to step down, previously said that the government would sell part of the state’s 99% shareholding this year or in early 2018.

“The ultimate decision will be subject to a range of factors including prevailing market conditions but the overriding consideration will be whether any transaction is likely to maximise the return for the state,” he said.

Today he told the Dáil the vote was a mistake, adding that TDs had already cleared the way for the AIB sale when they endorsed the programme for government.

A spokesman for the Department of Finance told Fora the sale was still expected to go ahead when market conditions were suitable.

Several opposition TDs have called for the proceeds of the share sale to instead be spent on much-needed investment in projects like housing or hospitals.

Gross national debt stood at 75% of the size of the economy by the end of 2016, or just over €200 billion, which means a €3 billion return would only reduce debt by about 1.5%.

In a recent article, Howlin said that the proceeds from the sale must be kept in AIB “until such time as we know we can use it”.

Note: This article has been updated to include further comments from Michael Noonan.

Reporting by Gráinne Ní Aodha and Peter Bodkin.

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