THE TAOISEACH Brian Cowen has described significant changes to the National Asset Management Agency (Nama) Bill, announced on Wednesday, as part of a continuing improvement in the legislation.
The Green Party has claimed credit for the changes, which include a risk-sharing mechanism between Nama and the banks and an 80 per cent windfall tax on developers.
“They’re very much a part of a continuing improvement we’re seeing in the legislation, we provided draft legislation at the beginning of the month for public consultation,” Mr Cowen said.
“The Minister for Finance has been always open to constructive comment. And the important thing about that legislation is that again it is a key to our economic recovery.”
However, the Labour Party said the Bill failed to address the key issue of the what discount will be paid for distressed loans. Finance spokeswoman Joan Burton said her main criticism was that there was no change of the valuation method, nor was there any reduction in the powers of Minister for Finance Brian Lenihan .
She said the Government was sticking to its method of long-term economic valuation of the assets, despite widespread criticism, rather than paying market value that reflected the huge depreciation in the assets underlying the loan. “That is the core of the issue. The Minster has vast powers to pay bloated prices for distressed bank loans. He has extraordinary powers and none of them have been affected by the new draft.”
Mr Cowen said the legislation provided the prospect of more lending in Ireland’s banking system which would help businesses survive, compete and prosper.
He was speaking to the media after delivering an address on the Lisbon Treaty referendum to Fianna Fáil’s Dublin South organisation at the Irish Management Institute in Sandyford.
The Taoiseach was asked to respond to Fine Gael finance spokesman Richard Bruton’s call for the Government to publish the names of the 1,500 people who will be the beneficiaries of the Nama plan. Mr Cowen said the Minister for Finance Brian Lenihan had dealt with that very adequately on the the News at One programme on RTÉ.
“All of our activity here is towards protecting the interests of taxpayers whilst effecting a restructuring of the banking system that provides us with confronting the core issue: more access to credit for Irish business at this critical time.”
Ms Burton, who was speaking at the Labour parliamentary party meeting in Faithlegg, Co Waterford, said that the new windfall tax announced in the Bill was being introduced many years too late.
“It’s like being told to go into the orchard and look for apples in December, long after the harvest has been collected,” she said.
She also criticised the proposal for risk-sharing, as set out in Section 47 of the Bill. Ms Burton said that the scheme in the Bill was for the issuance of two kinds of bonds, and not the original proposal of Prof Patrick Honohan, now governor of the Central Bank, that a stake in Nama be extended to shareholders of the banks in return for the State paying less for their loans.
“The bond proposal relates to the bank and not to shareholders. I think we will need more information on this complex provision, involving subordinated bonds. The Minister will need to explain it in some detail before we can decide on its merits,” she said.
She did welcome new provisions for criminal sanction which have been introduced in Section 7 of the Bill.
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