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THE COALITION HAS come under fire in the Dáil over the decision to accept an IAG proposal to buy the State’s 25.1 per cent stake in Aer Lingus.
The government yesterday decided to back IAG’s €1.4 billion buyout of airline after four months of uncertainty.
The deal values the taxpayer-owned share at around €335 million.
After a blazing row over Dáil procedures, a lengthy debate over the proposal to sell the airline got underway and involved several contributions with nearly all opposition parties and independents TDs opposing the sale.
Independent left TD Clare Daly said the main driver of the IAG bid was to satisfy the commercial interests of the aviation giant’s British, European and Middle Eastern shareholders.
She accused the government of orchestrating the protracted negotiations over IAG’s offer which resulted in a bid with improved conditions that was agreed by cabinet last night.
There is absolutely no doubt now in my mind that the process that has been under way over the past number of months is nothing more than a stage-managed, orchestrated charade designed to give the illusion that ye were tossing and turning and debating issues and wrestling concessions from IAG, when in actual fact ye’d already decided upon the outcome long ago.
Anti-austerity TD Ruth Coppinger accused the government of “steamrollering” the motion through the Dáil giving no time for those opposed to the sale to put pressure on Labour TDs over “this act of treachery”.
“It won’t be forgotten and will be the final nail in their [Labour's] coffin. Aer Lingus doesn’t need IAG, IAG needs Aer Lingus.”
Last night, the eight Labour TDs who had opposed the original offer – including Joe Costello, Dominic Hannigan and John Lyons – indicated they were supportive of the revised proposal.
Banking inquiry chairman and Cork South-Central TD Ciarán Lynch said the revised offer is a “very significant improvement” on the original offer and represents a good deal.
Sinn Féin’s transport spokesperson, Dessie Ellis, said that the decision would be one the country would come to regret in the future.
This is the wrong deal for Ireland and Labour knows it, but they do not have the courage to act on that knowledge. Fine Gael and IAG are thick as thieves and your party having got the run around are being trotted out to say how all concerns have been allayed.
“Aer Lingus is worth infinitely more to Ireland than the €335 million this government will get for cashing in the 25 per cent Fianna Fáil left the state with after their calamitous reign,” he said.
For its part, Fianna Fáil said tonight it would attempt to suspend further Dáil debate and the proposed vote on the sale after the emergence of a consultants report which sets out out a range of cost reductions across the airline.
The Nyras report, which was commissioned by Aer Lingus, includes a proposal to outsource part of the the airline’s aircraft maintenance to Eastern Europe.
Transport spokesperson Timmy Dooley said the report needs consideration by the government and TDs. He called for the Dáil debate to be suspended in the meantime.
“If there is a shred of good faith on the Government benches, there will be no vote on the future of Aer Lingus unless and until TDs get to examine all the relevant paperwork relating to this deal and to the airline’s plans, including the Nyras Report,” he said.
Originally published 6.42pm
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This is getting way too complicated for me! I quit!!
It’s simple, they screw us and we take it
Its simple – the idea of 17 different nations all having the same currency is daft
You cannot have ONE currency and 17 FINANCE MINISTERS!
Mmmm its begining to look an awful lot like Declan Ganleys proposal to federalise the EU debts using the ESM as the vehicle to facilitate this.
Correct Sean. Also looking an awful lot like Ganley was right when he said there would be no money left in the ESM by the time Ireland required the second bailout.
I don’t agree Sean. The fact that knowing that the EFSF and ESM will be able to intervene and buy bonds directly will probably push the yield down even without them actually having to do anything. That will make it possible for countries to actually use the markets instead of the bailout mechanisms.
If you look at the recent short-term Spanish bond issue it was actually oversubscribed from buyers. Yes, Spain paid a premium because the markets knew that they have no other choice currently but to pay that price. If however the Spanish can simply turn to the EFSF/ESM and sell their bonds to them at a lower yield then the markets will ultimately have to follow because they have to buy and sell bonds to make any money. There the markets will offer the lower rates and the EFSF/ESM won’t actually have to do anything.
@ Jim Walsh
Your analysis is somewhat skewed.
Firstly EFSF and ESM do not have the €750 billion being brandied about, this is an imaginary figure because they are just sums that have been promised by EZ member countries including Italy and Spain! Where is it going to come from if it is actually needed?
Secondly, you sound very simplistic when you assume that the markets will offer lower rates because of (a non existent fund?). That is precisely what was expected when we had this phony €100 billion bailout for Spanish banks 2 weeks ago, rather the markets rightly saw through the charade and the Spanish bond rates has not reduced but topped 7% this week .
By the time the markets see that this an unholy cross between a sham and scam- it will all start again.
Jim. 750bn is nowhere near enough to bailout Spain and Italy. It will not solve the crisis only buy more time.
Not at all… Italy payed 20% of Spain’s bailout at an interest of 3% … To pay this Italy borrowed from the ESM at 7% … Basically it has put both countries over the edge and now Italy’s closer to boiling…. European union fail…..
This is just a precursor to the American dept crisis… The real crash the dollar bust
750bn would be enough to bailout Spain for this year, but not Spain and Italy.
Spanish banks borrow over 300bn a month from the ECB, and have 3 trn in debt.
This is a big step forward but a long way from resolving it. Look at how Greece has nearly swallowed half of that 750 already and it is only 1/14 the size of these two and its banks and private sector have low debt, as opposed to Spain/
Italy did not borrow from the ESM at 7% – they borrowed on the open markets at 7%
The whole thing is going to burst in 3 years time
What date?
I predict this will go ahead and the morning headline will be ‘costs drop on borrowing’ followed by an evening headline of ‘costs rise after morning rest-bite, markets unconvinced’. Whatever they do the markets keep coming back at us harder, we really are slaves to the markets.
We are slaves to the market but it is a point as well, that half gestures like this, can’t be expected to solve anything.
The crisis is because of the euro. You cannot have a monetary union without a fiscal union. And you cannot have a fiscal union without political union.
The parliaments of Europe will never agree to political union
They will also never agree to fiscal union. The principle power a parliament has is control over the finances. They will never hand over this power to Brussels
The euro crisis could be over in the morning if the ECB was allowed to buy up sovereign debt. But Dr Merkel will not give them that power. She will only give them that power when there is a fiscal union. And a full fiscal union, if there ever is one, could take years
For example the Bank of England has bought up a THIRD of UK sovereign debt. That is why Britains yields or interest rates are down at 1.5%. If Spain had its own central bank, it could mop up all their govt debt and have the same low yields
The markets ate sure to look for a way to exploit this if it becomes reality. Is it possible?
The question is will it become reality? All 17 countries will have to agree to this scheme. Will the triple AAA countries agree if they think it will damage their ratings?
Sorry that last comment should have been directed at Too Trueleft and not Sean.
That piggy bank is looking awfully small right now.
*sorry not directed at you. General comment.
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