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Explain the term 'Privatisation' and state two examples of companies that have been privatised in Ireland - Leaving Cert Economics - Question 7 - 2008
Question 7
Explain the term 'Privatisation' and state two examples of companies that have been privatised in Ireland. The term ‘privatisation’ is used to describe the sale or ... show full transcript
Worked Solution & Example Answer:Explain the term 'Privatisation' and state two examples of companies that have been privatised in Ireland - Leaving Cert Economics - Question 7 - 2008
Step 1
Explain the term 'Privatisation' and state two examples of companies that have been privatised in Ireland.
Answer
Privatisation refers to the process whereby public sector assets or enterprises are transferred to private ownership and control. This can lead to improved efficiency, reduced government expenditure, and enhanced service quality as the private sector often operates with competitive pressures and profit motives in mind.
Examples of Companies Privatised in Ireland:
- Aer Lingus: The national airline of Ireland, which was privatised to promote competition and efficiency in the aviation sector.
- Eircom: The telecommunications company that was privatised to encourage investment and innovation in communication services.
Step 2
Outline two arguments in favour of Privatisation and two arguments against Privatisation for the Irish economy.
Answer
Arguments in favour of Privatisation:
- Improved Quality / Choice of Services: Privatised firms often improve service quality due to competition, providing consumers with a greater range of choices.
- More Competitive Prices: Consumers benefit from potential lower prices due to the competitive environment induced by privatisation.
Arguments against Privatisation:
- Loss of Non-Profit Making Services: Essential services that do not generate profit may be discontinued, adversely affecting consumers who rely on them.
- Curtailed Job Security: Privatisation may lead to layoffs and reduced job security, particularly in previously public sector jobs where profit becomes the primary motive.