State-Owned Enterprise Policy and the Loss of Economic Sovereignty: The Case of Ireland

Abstract

The global financial crisis that erupted in 2008 has had enormous implications for the composition of the state-owned enterprise (SOE) sector in many advanced economies around the world. The crisis resulted in the nationalization of financial institutions in a number of economies, but has also led to a number of countries pursuing policies of privatization to raise much needed revenue to tackle high levels of indebtedness. This article describes the changes to the composition of the Irish SOE sector since the onset of the economic crisis in 2008, as well as its impact on the stated plans for the future of the SOE sector. It addresses the question of privatization and the conditionality for the sale of state assets contained in the bailout agreement signed between the Irish government and the IMF/ECB/European Commission (the “Troika”). It finds that Ireland has been afforded a degree of discretion with regard to the choice of assets to be sold and the application of proceeds. Revenue targets, however, have been dictated by the Troika. This contrasts with the agreements forged between the Troika and the governments of Greece and Portugal where there has been a far greater degree of conditionality attached to SOE divestments.