Government scraps rule capping bankers' pay at €500,000 after selling off last of the State's shares in AIB

THE Government has scrapped a rule that caps bankers' pay at €500,000 after selling off the last of the State's shares in AIB that were purchased during the infamous bailout.
In the aftermath of the financial crash, the Irish taxpayer was forced to pay out tens of billions of euros to rescue
Advertisement
2
It comes after it sold off the last of the State's shares in AIB
Credit: REUTERS/Clodagh Kilcoyne/File Photo
As part of this bailout, a series of rules were put in place to tackle the banking sector - including a pay cap of €500,000 per year for staff at banks where the State owned a stake.
Having now sold off all its shares in Bank of Ireland and AIB, Finance Minister
He said: 'I understand that any decision like this with regard to bank pay is one that will always be viewed critically by people.
'But what I would like to say to those – and there are many who continue to be concerned – is that firstly, I don't believe it is correct we set pay in a company that we no longer have any share in.
Advertisement
Read more in News
'As a small open economy we're trying to attract investment into our economy and I would hope that banks like AIB and Bank of Ireland will continue to be able to attract investment in their future.
'For that reason, us playing a role in setting their pay when we no longer own a single share in those companies is not appropriate.'
The State still owns a 57 per cent stake in PTSB, which is valued at €600 million.
However, Minister Donohoe said he wanted to lift the pay cap for this bank as well as he believed keeping it in place would put them at a competitive disadvantage.
Advertisement
Most read in The Irish Sun
Sinn Fein's
She also hit out at the process of selling off the AIB shares as she claimed the Government lost out on €5 billion by flogging them too quickly.
FINAL SHARES SOLD
In 2022, the Government sold off its final shares in Bank of Ireland.
Over recent years, the State has sold its shares in AIB on a phased basis, with the final two per cent of ownership flogged this week.
Advertisement
In total, Ireland received €29 billion from the selloff of AIB and Bank of Ireland shares – not including the 57 per cent stake in PTSB that is currently worth €600 million.
Taxpayers forked out €29.4 billion to the three banks in 2009.
The full cost of the bailout process is estimated to have cost the State more than €64 billion when other banks are included, such as Anglo Irish Bank, Irish Nationwide and EBS.
2
The Government has scrapped a rule that caps bankers' pay at €500,000
Credit: REUTERS/Clodagh Kilcoyne/File Photo
Advertisement

Try Our AI Features

Explore what Daily8 AI can do for you:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

RTÉ News​

an hour ago

• RTÉ News​

€122 billion investment needed by 2030 to meet housing targets

A new survey reveals that a total investment of €121.6 billion is needed between now and 2030 if Ireland is to meet its housing targets. Deloitte's new Crane Survey Report found that an investment of €16.4 billion is required this year, rising to €17.2 bilion in 2026, €19.3 billion in 2027, €21.3 billion in 2028, €23.3 billion in 2029 and €24.1 billion by 2030 to achieve the Government's target of 60,000 homes a year. Deloitte said that given the scale of the challenge, Ireland is unlikely to reach or maintain the annual output of 60,000 homes. The Deloitte Crane Survey Report is a comprehensive analysis of construction activity across Irish cities, tracking what is being built and where and what this means for the country's economic and social priorities. The latest Crane Survey report estimates a total housing output of 33,000 this year, below the Government's target of 41,000. Risks to delivery in 2025 are "tilted to the downside", according to the report, which adds that in the absence of a "healthy planning pipeline" it is very difficult to see the required level of 60,000 homes a year being achieved in the first instance or maintained. A total of just over 30,230 new homes were delivered in 2024, a drop of 7% on 2023. Meanwhile, just 32,400 homes were granted planning permission last year, down 3%. Deloitte said this figure is "particularly stark" as it represents just two-thirds of what is needed each year if Ireland is to deliver the 60,000 homes a year required to meet current housing need and future population growth. Its analysis shows the drop in granted planning permissions was driven by a substantial reduction in the number of apartments which received planning, down 39% year on year. It noted that commencements soared to 69,060 units in 2024, up 121% year on year, but this was linked to expiring incentives, which were ultimately extended. Commencements have been subdued in the opening months of this year, it added. Deloitte said the Government's decision last month to extend planning permissions for schemes due to expire shortly is welcomed. It also said the recently announced reforms to the current Rent Pressure Zone (RPZ) model are a welcome step in the right direction, but, on their own, are unlikely to yield a significant activation in commencements. Today's survey notes that just 895 purpose-built student accommodation bedspaces (PBSA) completed construction last year. This was down from 1,630 bedspaces in 2023 and represents the lowest level since Deloitte's records began in 2016. The delivery of PBSA bedspaces was confined to Cork and Dublin - with 620 at NovelBottle Works at the former Coca-Cola bottle factory on the Carrigrohane Road in Cork and 190 bedspaces at The Residence on Prussia Street in Dublin. The remaining bedspaces were delivered at Blackhall Place in Stoneybatter in Dublin where a refurbishment added an additional 80 beds. The report noted that by the end of the first quarter, 1,400 PBSA bedspaces were under construction across six schemes, compared to 1,160 bedspaces at the same time last year. Construction is spread across Galway, Dublin, Limerick and Kildare. Today's report also shows that completions in the Dublin office market rose last year to 169,500 square metres, a substantial increase on 2023 volumes of 95,400 square metres. But Deloitte said this rise was expected and should not be regarded as an indication of increased construction activity within the sector and reflects the completion of an overhang of stock. The report says that the only delivery expected in 2027 based on current construction statistics is 1 Adelaide Road, which is already pre-let in full. This means 2027 may be the first year since 2015 that no new office space will be delivered in the city, it added. Meanwhie, the volume of new rooms added to the hospitality market declined by 17% last year with just 1,358 new rooms. Some 4,060 rooms were under construction in the first quarter of this year, however, with Dublin absorbing the lion's share. This represents a significant rise on last year's Crane Survey (2,850 rooms) as several large hotels commenced construction, including at Dublin Airport, where 412 rooms are set to be delivered. In total, 1,410 new rooms are due to be added in 2025. A further 2,510 beds are due to be delivered in 2026, with the remaining beds under construction due to be delivered in 2027. Kate English, Chief Economist at Deloitte Ireland, said we are seeing cranes across the skyline, but not enough where they are needed most. "What this research reinforces is that the biggest issue facing Ireland right now isn't demand, it's supply. Whether it's homes, student beds, or affordable units, we're simply not building enough to meet the needs of a growing population and a resilient economy," Ms English said. "A stable policy environment is crucial in Ireland, as inconsistency in housing policy will deter and dampen investor confidence in Ireland. Without stability, capital will be redirected to jurisdictions offering more predictable and investor-friendly environments. This is not a hypothetical risk, it is a market reality," she cautioned.

Irish Times

2 hours ago

• Irish Times

Ireland needs to ditch empty promises and economic fairy tales and start confronting reality

The next six weeks or so are going to go a long way to defining the Government's term in office. The printers are going to be busy. We are due an updated housing plan, a new strategy on competitiveness and productivity, the Summer Economic Statement and a new medium-term budget strategy along with a revised National Development Plan outlining state investment plans. Then, in the middle of all this, there is the deadline for the US/EU tariff talks on July 9th. The Government needs to use this crucial period to set some kind of coherent economic narrative for its term. So far it has been firing blanks. For example, bits of its housing plan are drip-feeding out in an often-disorganised fashion. Perhaps this is meant to give the impression of busyness, but all it does is confuse people. READ MORE At the heart of all this is credibility. A believable strategy must have some hope of delivery. And here the State – in the widest sense of the Government and the public service – is struggling. It is not just that things are happening late – like the National Children's Hospital. Or that there are signs of waste and carelessness with public money – step forward the Leinster House bike shed. It is that a lot of vital stuff is simply not happening at all. It is a stretch to believe that the Metro will ever get built. Or the giant project to bring water from Shannon across the State. Or the offshore wind infrastructure that is meant to be at the heart of our energy transition , where the Draghi report on EU competitiveness showed Ireland has one of the most long-drawn out consent mechanisms in Europe. In this context, government targets take on an air of fantasy. Less than six months into the Coalition's term, Minister for Housing James Browne told us this week that the target of building 41,000 homes this year is not going to happen. So why should we believe the target for 2026 or the 300,000 plus homes promised during the Coalition's term? The Departments of Finance and of Public Expenditure will publish a budget strategy over the summer, based, we must assume, on tighter control of day-to-day spending. But key spending targets have ended up being roundly ignored in recent years. Central Bank researchers estimated this week that permanent Government spending has risen by 37 per cent since 2021. Had the annual spending limits of 5 per cent set by the previous administration been adhered to, the increase would have been 16 per cent. That is a €16 billion difference. Official documents and targets seem to exist in some kind of parallel universe where no one really expects them to happen. They are more fairy stories than strategy. And the risk with the plans coming in the weeks ahead is that these are more endless checklists of stuff that is happening already and stuff that might or might not happen at all. Some central themes and directions are urgently needed. And some convincing messages of actual action to get things done. Investment is built on certainty, yet in key areas such as climate change and housing this is simply missing. The current drift has a cost. The stalling of investment across the economy is in part due to threats of tariffs from Donald Trump . There isn't much the Government can do about that. But it can start to get its own story straight. Lack of clarity about housing policy is causing parts of the construction industry to sit on its hands. With talk of more incentives and tax breaks on the way, and uncertainty on state commitment in areas of social housing, builders wait to see what emerges. House building volumes slipped by 4.3 per cent in the first quarter of this year, compared to the previous three months. Meanwhile, big foreign investors – and their international headquarters – are starting to realise that promises to deliver better energy and water infrastructure are simply not being met. Investment plans, on hold to see how the US/EU talks work out, will restart at some stage. Ireland is at risk of not being in the frame. The first real alarm bell for this was when Intel ditched Oranmore in Co Galway as a possible site for a big new plant in 2021 because the State could not guarantee how long planning would take on vital supporting infrastructure. This followed the seemingly endless planning saga for the Apple data centre in Athenry , also Co Galway. A convincing economic narrative needs a few central points that everyone has signed up to. Read the Central Bank research out this week for a convincing case on how state investment remains low here, despite tripling over the past decade. This is because the economy and population have grown so fast and the economy was already hobbled by years of underinvestment after the financial crash. To allow space for investment to continue to grow – and provide a buffer if the public finances tighten – other parts of the budget need to be under control. This means keeping the budget in surplus and continuing to put away excess corporate taxes in the funds for the future. This needs to be a central part of a coherent strategy. To be credible, the whole Government – including Micheál Martin and Simon Harris – need to explicitly sign up to this. If it is just a creature of the budget departments, then it will be there to be negotiated away during the budget process. It goes without saying that the second leg of any strategy needs to focus on prioritisation and delivery. Many thousands of words have been written about this. And the challenges are significant. But Ireland, for now anyway, is in a uniquely privileged position with a flush Exchequer and room for manoeuvre. The resources are there. Spending them well is the challenge. Ireland can consider how to respond as the Trump story plays out. The odds are that it will continue to do so long after the July 9th talks deadline. But the Government needs a convincing narrative of how it is going to manage what is under its control and use what may prove to be transitory budgetary riches. There are dangers ahead. But we are starting from a good position, with full employment and flush coffers that are the envy of many other countries. The Government needs to start telling a better story – not just to the public and investors, but also to itself.

Extra.ie​

3 hours ago

• Extra.ie​

Dublin Airport hits out at council's enforcement notice

Dublin Airport's operator has been hit with a planning enforcement notice for breaching the highly contested passenger cap, describing it as 'a sorry indictment of the mess that is the Irish ­planning system'. Describing the airport as the most vital piece of transport infrastructure in Ireland, a DAA spokesman said: 'The system is quite simply broken and needs to be overhauled.' The airport is limited to ­handling a maximum of 32 ­million passengers a year under a condition of the planning ­permission granted in 2007 for Terminal 2. Dublin Airport. Pic: Getty Images However, the DAA and many airlines have challenged that limit, saying it is limiting the country's economic growth and could result in higher fares for passengers. Earlier this month, Dublin ­Airport said it was expecting more than ten million ­passengers to pass through during the peak months. A High Court-imposed pause on the cap, won by the airlines, means more than 36 million ­people could use the airport this year. Last year, the airport handled 33.3million passengers. Dublin Airport. Pic: Getty Images Fingal County Council confirmed yesterday it had issued a planning enforcement notice to DAA for breaching the cap. The council is reported to have received complaints from 60 individuals about the alleged planning breach. In a statement, the council said its enforcement notice included a two-year period to comply with planning conditions imposed by An Bord Pleanála over passenger capacity at Dublin Airport. Pic: Mark Gusev/Shutterstock A council spokesman said: 'The two-year period provides an opportunity for DAA to ­progress their planning ­applications to increase ­passenger capacity at Dublin Airport or take such other steps as they consider appropriate to achieve compliance.' Mayor of Fingal Tom O'Leary, a Fine Gael councillor, said the county council had to follow the legal process. He continued: 'This makes it even more urgent for the Government to assist in any way that they can to try and sort out the capacity issue at Dublin Airport. They need to do whatever they can to ensure that the ­airport can grow in an orderly manner and that the residents around it are looked after.' However, the DAA said that until changes were made to the cap, Ireland's national airport was 'hamstrung' and could not get on with its mandate to grow Ireland's connectivity. 'The airport needs to be reclassified as national strategic ­infrastructure, with decisions made by a national planning body and not a local authority,' a spokesman said The High Court pause on the cap is likely to continue for a year while certain matters related to aircraft take-off and landing slot allocations are examined by the European Court of Justice. The Government plans to remove the cap through legislation, starting in autumn. Ryanair has called for urgent action from the Government, stating that local authorities should not oversee national transport infrastructure. A Department of Transport spokesman said it was aware of the enforcement notice. They continued: 'The minister has recently reiterated the importance of DAA continuing to engage proactively with the planning authority and the ­Aircraft Noise Competent Authority to facilitate progress on the two planning applications DAA has lodged.'