Good Ship Nama Sails Close to the Rocks
Deaglán de Bréadún
On the face of it, the Government would appear to be in considerable difficulty after last weekend’s Green party deliberations on the National Asset Management Agency. But although the voting figures in the “Preferendum” (see below) are very negative, some Green sources keep insisting things aren’t as bad as they look.
What in the Nama Gawd are we gonna do now? (Photograph by James Flynn/APX)
The Nama legislation in its current form got a mere 13% whereas the two most-favoured options both specify that there must be no long-term economic value added to the bank loans which should be paid for at market-price only.
People who are more intelligent and better-schooled in economics than I am, tell me this would lead to the collapse of the banks. Meanwhile it is reported that Brian Lenihan will impose a 30% discount on the transferred loans, which means the State will still have to cough up an extra €10 bn. But then we’re getting an “assist” from the European Central Bank and, as one Green contact put it, we shouldn’t look that gift horse in the mouth and the Labour plan for full nationalisation would mean no help from the ECB.
I was just remarking to friends that I have done more reading on Nama at this stage than on some of the subjects for my BA finals at good old UCD!
Herewith today’s news story from our print edition and if you are interested in reading a related op-ed piece, click here.
Nama Bill in its current form rejected by Green grassroots
DEAGLÁN de BRÉADÚN, Political Correspondent
Mon, Sep 14, 2009
GOVERNMENT PLANS to establish the National Asset Management Agency (Nama) have suffered a significant setback with only 13 per cent of the attendance at a Green Party conference expressing support for the legislation in its current form.
The Nama Bill came in fourth out of six options placed before an all- day meeting of more than 140 Green activists from around the country held in Athlone, Co Westmeath.
The most popular choice at 23 per cent was for an agency which would pay only the current market rate for loans transferred to the banks.
In second place at 20-21 per cent was the so-called “Swedish solution”, which would also mean paying only the market price for loans.
This will place further pressure on Minister for Finance Brian Lenihan, who is to announce the valuation he will place on bad loans in the Dáil on Wednesday.
Although Green Party activists voted by a large majority to withhold the results of Saturday’s “preferendum” for the time being, The Irish Times understands the results were as follows:
1) Nama with strong Green Party policy conditions and only current market values being paid for transferred loans: 23 per cent;
2) The “Swedish solution” with each institution forced to write down its loan book to current market values and the possibility of separate asset management companies for individual banks: 20-21 per cent;
3) A free-market, laissez-faire approach, with banks left to fend for themselves: 14-15 per cent;
4) The Nama legislation in its present form: 13 per cent;
5) Partial nationalisation, with a “good bank” to assist small and medium enterprises: 12-13 per cent;
6) Full nationalisation: 12 per cent.
Green Party sources have cautioned strongly against premature interpretation of the vote as a signal that the party would walk out of the Government.
The attendance at the special policy-making convention on Nama and the renegotiated programme for government on October 10th would have an attendance three or four times greater than last Saturday’s consultative session.
However, the vote is still likely to cause concern among the party’s coalition partners.
Pressure will increase on the Green Party leadership to win further concessions and on Fianna Fáil to agree to them.
Green Party sources said there was “a very intense debate” about the valuation announcement to be made by Mr Lenihan.
The format of the special convention on October 10th, which will be crucial for the future of the Government, remains unclear and is likely to be strongly influenced by negotiations on the programme for government.
(c) 2009 The Irish Times