SIGNIFICANT LEGAL and constitutional problems overshadow the proposed National Asset Management Agency (Nama), the Labour Party has said.
The party says it has identified problems beyond concerns about exposure of taxpayers to overpaying for toxic loans from Irish banks.
Party leader Eamon Gilmore and finance spokeswoman Joan Burton will today launch a critique of Nama, which questions its legal basis and its authority.
Protecting the Taxpayer: Labour's Analysis of the National Management Agency Billalso criticises the proposed additional powers to be vested in Minister for Finance Brian Lenihan.
A new draft of the Bill will be published later this week ahead of a special meeting for members of the Green Party in Athlone. Mr Lenihan will introduce the Bill in the Dáil on September 16th, at which time he will also announce the valuation of bank loans which Nama will acquire.
A Labour spokesman said the party’s criticism raises legal and constitutional issues about the Bill and the way that it will work.
The document is expected to hone in on the principle underlying the provisions, in particular the new powers and discretions of the Minister.
It will also criticise what Labour asserts is the inadequacy of oversight to be applied to Nama.
The spokesman said the party remained opposed in principle to Nama and would vote against the legislation “unless there is an extraordinary U-turn on the part of the Government”.
Mr Gilmore and Ms Burton have consistently called for the nationalisation of the banks on a temporary basis. The party said it would adopt a responsible position in the Dáil on the legislation to ensure the interests of taxpayers were being protected.
Minister for Communications Eamon Ryan said that Coalition partner Fianna Fáil had agreed to the concept of risk-sharing as a matter of principle.
“The concept of risk-sharing where banks take some of the risk between market value and long-term economic value was a crucial element, and we have agreed that in principle now and that’s a huge element that progressed the Bill,” he said.
He also said the Green input into the Bill could result in a windfall tax on speculative profit from property at a time in the future.
Taoiseach Brian Cowen said the Government had listened to “constructive contributions from all sides” in framing the legislation for Nama and that “risk-sharing [between the banks and the taxpayers] will be a feature of the legislation”.
Mr Cowen, said it was “important to show the taxpayers” that Nama would “protect” their interests.
Fine Gael finance spokesman Richard Bruton again defended Fine Gael’s national recovery bank against criticism from a second former leader of the party, Alan Dukes.
“Nama proposes not to pay the market value but proposes to pay a ‘hope value,’ ” Mr Bruton said.
Let’s not forget that the French tried Nama on a smaller scale and lost 60 per cent of the money they put into it.
“They are now operating a system like the one proposed by Fine Gael.”