Leasing Cork and Kerry sounds like a good plan, but I don’t know whether the Royal Navy has any current interest in the treaty ports or in building associated air bases. Surely it would be much better to lease Donegal, Cavan and Monaghan to the Northern Ireland Executive? That would bring about
- a unified Ulster, which would please Sinn Fein
- an enlarged Ulster, which would please the unionists
- a major cross-border initiative, which would please Fianna Fail
- a large drop in road accidents in the Free State, which would please JtO.
The cue, “A modest proposal,” should have alerted you to this being as much a practical recommendation as Swift’s advice to eat our children. I’m sure the three minutes it required to read it merely prevented someone from boiling an egg…
Thanks for the link — nice to be reminded that there are still quite a number of economists out there who can write English and whose articles don’t read as though they’d been concocted with the aid of a mission statement generator.
Another quasi-Austrian mole? George Mason University? The Stats website?
I smell heresy …
The standard of debate among economists in Ireland is so low that I really haven’t a clue as to whether the author intended this as a joke or a serious proposal. At least in Swift’s day, people would have known it was a joke.
Selling government owned assets is not a completely ridiculous idea. Arizona has already sold its “capitol” building and several other properties. It got a quick infusion of new money. It rents the buildings back from the investors on a long term lease.
November 17th, 2010 at 6:58 am
For once I agree. It is a very bad joke.”
But it is not a bad joke. Selling assets is a tried and true exit from debt. If you can arrange a sale plus lease back all the better. Sell the Aras. Why not? Its just an old shack that is a huge cost to the Irish taxpayer. It never did me any good.
There are huge pools of very deep pockets in the world that would jump at the right deal. It just has to be structured right.
There is sometimes discussion on this blog comparing U.S. states with EU countries — is Ireland the new Texas or West Virginia? U.S. states have had two centuries of cleverly circumventing there own consitutional restrictions outlawing annual budget deficits. Lease back of state parks, governors mansions, state capitols etc are tried and true devices.
What’s wrong with selling off the Phoenix Park? Certainly better than destroying the Irish economy for generations to come.
If we consider are to seriously consider selling the South West then a couple of points must be debated.
- whether it’s sold with sitting tenants or as vacant occupation
- already mentioned above
- if sold vacant, where would the new owner get tenants?
- what the gross margin is likely to be
- Turnover may well be €25.3 billion, but what’s the margin?
- Could we assume a stable gross margin of anything more than 10%?
- what are the investment requirements to maintain or improve profitability
- how much new infrastructure is required?
- e.g. should we rebuild the West Cork Railway?
If I take a few - ehem - realistic assumptions.
1. Sell it with tenants in place. It’d take too long to replace them and maintenance of the fixed assets would be neglected for too long. Grass grows like bejaysus in Cork and Kerry and the roads would all have a green stripe by the time you managed to get new people in everywhere.
2. Gross Margin is likely to be less than 10%, unless we really gut the tenant welfare schemes and stop the HR’s cap and bypass allowance. Estimate ~€2.5 billion gross margin per year, growing at no more than 4-5%
3. Infrastructure spending will be minimal for the next decade, or through the planning horizon.
On that basis, taking a 5-6% discount rate, you’d hardly value the South West at much more than its GDP, at least if you view it as a going concern.
Bill Gates could buy two South Wests, if we had another Ireland to sell.
Naah..we should hold on to the South West. It’s too pretty anyway and as a man with loads of family down there I’d be loath to force them all to move out. We’d be better off selling the oil and gas rights off the west coast for the €420 billion that I keep hearing they’re worth.
At the beginning of the crisis, I suggested that the country should sell County Donegal back to the British.
As things wore on, I revised this. The country should sell County Dublin back to the British. Trouble is they wouldn’t take the bait.
What the country could conceivably do is package up all our useless national banks into one juicy monopoly and sell it to a major retail bank. They’d bite, but it would ruin the country further in the long run.
” supra-national community of 70 million “Irish,” ”
Too bad Ireland cannot figure out a way to tax or otherwise extract money from them. My understanding is US nationals living outside the US are still required to file tax returns, and if the try to expatriate there is some sort of final tax procedure.