The Labour leader wants to defer the flotation until the proceeds can be used for capital investment...
Labour Party leader Brendan Howlin is calling on independent ministers to stand up against Michael Noonan giving the green light to the flotation of AIB during his final days as Minister for Finance this week.
The sale of existing shares in the bank, which equates to about 25% of AIB shares and should raise roughly €3 billion, is set to be the biggest flotation on the Dublin and London stock markets this year.
Howlin, however, believes the move should be deferred until we secure permission from the European Commission to use the funds for capital investment, rather than further paying off the State's debt.
"There is a fundamental issue of democracy involved here," he told this morning's Newstalk Breakfast, noting that the Dáil passed a Labour party motion to prevent the sale.
"That's the decision of the elected chamber of the people and I don't believe the Government has any democractic mandate to proceed with such a vital decision without seeking to at least overturn that," he continued.
"But to ignore it is fundamentally wrong and undemocractic."
Howlin argued that Noonan should leave the decision to his successor, so they have "a clear horizon then in front of him or her to make such a vital determination that will impact on our nation's wellbeing."
He added that the Government's decision to ignore the motion, saying that it was not legally binding, was further undermined "by a Taoiseach who is retiring and a finance minister who is retiring."
"I think there is no legitimacy at all in a decision being made by a cabinet that in its current make-up will not be there much longer," Howlin said. "They should leave it to an incoming cabinet to make a decision and if the decision is the same, that incoming cabinet should seek the approval of Dáil Eireann. That's what democracy means.
"Unless Dáil Eireann is to be reduced to a simply a rubber stamp and further undermine people's confidence in our democratic systems, the views of the Dáil must be taken into account."
When it was put to him that a deferral could lose the country money, Howlin countered that "most analysts think it's not the best time [for a sale]" and that shares should become "increasingly valuable rather than less valuable" as both the economy and the bank improve their performances.
Outlining his reasons for deferring the flotation, Howlin said:
"We need that €3bn to invest in our housing, infrastructure, roads, sewage, transport, all the things that are desperately short of capital.
"The mid-term review of capital between now and 2021 will allocate about €2.6bn. If we actually allocated this money to it, we could double that to €5.6bn.
"Of course, Labour has also been arguing that we should abolish the daft notion of a 'rainy day fund' and utilise the €3bn set aside for that, and really have an impactive investment fund between now and 2021 of €8.5bn."
Howlin is confident that Ireland can secure Europe's approval for such an investment, stating that he had already discussed the matter with socialist leaders – "including a number of prime ministers" – who are supportive of the idea.
He added that there is a working group established to "prepare for flexibilities in relation to the Stability and Growth Pact that would allow once-off windfall money like this to be invested in capital investment on a once-off basis."
Howlin also pointed to the leeway Italy has enjoyed in a similar case.
"The Government want to use all the money to simply reduce debt that is already falling," Howlin said. "So we get maybe 1-1.5% off a debt rate that is already falling to 72%. That made sense when we had debt of 120% but in the current falling debt ratios, it's the worst use of this money which is so urgently needed now for investment.
"That's the view of IBEC, it's the view of the Irish Congress of Trade Unions, and I think actually, it's the view of Leo and Simon! They've both said we need more money to invest in capital."