Cavalier plans for Nama agency are a potential disaster, Bruton warns

FINE GAEL/LABOUR REACTION:THE NATIONAL Asset Management Agency (Nama) has the potential to be a "disaster for Ireland", Fine Gael's finance spokesman Richard Bruton said.

Speaking at the Oireachtas committee on finance, Mr Bruton said the Government was being “cavalier” in its attitude to taxpayers. “We really are worried about Nama and it’s not out of some political opportunism. It is a very serious worry that we think this could be potentially, as it’s now drafted, a disaster for Ireland,” he said.

“The taxpayer is being asked to pay a hope value which is substantially above market value.” Mr Bruton said there was “alarming scope” for political involvement in Nama without any proper oversight.

He also said there was no mechanism for risk-sharing and no clarity on rules of engagement that might apply to developers.

“There is no mechanism whatever to guarantee that credit will flow as a result of Nama,” he said.

“Irish people are facing the prospect in the next few years of five billion extra in tax increases and five billion in spending cuts.

“And here in my view is a piece of legislation that is cavalier in its disregard for the potential extra cost on the shoulders of taxpayers that could be involved in the Nama proposal.”

Mr Bruton admitted that he had made a mistake when discussing Nama during a radio interview recently. Last week, Minister for Finance Brian Lenihan complained that Mr Bruton had claimed on air that the European Union had instructed Anglo Irish Bank to stop paying interest to senior debt holders. Yesterday Mr Bruton said he had been incorrect but said it was wrong of the Minister to suggest that “default” was at the core of Fine Gael’s alternative plan.

Labour’s finance spokeswoman Joan Burton said Nama would make Mr Lenihan the “property tsar” of one of the largest property companies on earth.

Ms Burton said no such powers had been given to any minister in an Irish government since independence.

“You will in effect yourself be the property tsar of one of the largest property companies on the earth,” she told the Minister.

“I think the powers that you are taking to yourself in this Bill are grossly excessive. I don’t know of any nationalised company now or in the past in Ireland where a minister had as much power as he has in relation to Nama.”

Ms Burton said the Irish people were potentially facing the “spectre” of a lost economic decade.

“All of us, Minister, over this rather wet summer I think have been in Nama Land, have seen Nama Land, and know Nama Land is a place where there are large tracts of zoned land, know that Nama Land is a place where there are housing estates, fine houses, almost completely built and there is no one to buy them.”

Ms Burton said the approach of the Labour Party was to prevent what Japan had experienced – a decade of economic stagnation with a “zombie economy and zombie bank system”.

Mr Lenihan said the problem with Japan was that it never faced up to its losses and dealt with them. “They never did a Nama,” he said.