THE EUROPEAN Commissioner for Economic and Monetary Affairs said he wants to see legislation setting up the National Asset Management Agency (Nama) passed as soon as possible.
Joaquin Almunia, the EU commissioner involved in negotiations with the Government on the establishment of Nama, met the Minister for Finance, Brian Lenihan, and the new governor of the Central Bank, Patrick Honohan, on a visit to Dublin yesterday.
“My wishes for the next couple of months here are, first, that Nama will be adopted by the parliament as soon as possible,” he said.
Nama was an instrument that was needed to tackle the problems across the Irish banks, and “to organise an orderly restructuring and consolidation of the banking sector here in Ireland”.
Mr Almunia acknowledged that the pricing of the toxic assets to be acquired by Nama was “a very, very technical issue” which included “political elements”, but the commission would assess how Nama calculated the value of these loans to avoid the breaching of any State aid and competition rules.
He hoped the Government’s valuation of the bank loans would comply with the European Commission’s guidelines.
Mr Almunia said he wanted the Government to continue to address the budget deficit, and for the Oireachtas to pass a budget to restructure the public finances.
He hoped the Government would organise “an orderly exit strategy from this very difficult period in the Irish public finances” in the upcoming budget.
Mr Almunia, who held discussions with the Government on its plans for changes to the public finances, said these efforts should focus on cuts in public expenditure in the budget in December.
The commissioner said he had been informed by Mr Lenihan during their discussions that the “room for manoeuvre” on tax increases was lower than when the Government first introduced measures to address the deficit.
“Probably the expenditure side should take the burden of the most important aspects of the adjustment,” he said.
Mr Lenihan said he would shortly outline the financial implications and the effect on the State’s borrowing if the Government did not make adjustments to the level of public expenditure.
He said if the State’s interest bill continued to rise, it would find itself in a very serious situation.
Asked about a report which said AIB and Bank of Ireland needed a further €9 billion in capital, Mr Lenihan said Mr Honohan was assessing whether banks needed the minimum regulatory capital or a higher level, and this was a “very delicate matter”.
The Minister said he was satisfied that the changes agreed with the Green Party to include a bank levy in the Nama legislation should the agency incur a loss would not compromise the banks.
