Taoiseach Brian Cowen has again rejected suggestions the National Asset Management Agency (Nama) is a bail-out for bankers and developers.
Speaking during the resumed Dáil debate on the issue this morning, Mr Cowen said failure to pass legislation passing Nama would condemn the Irish economy to a period of stagnation and isolation.
“If there is one message I want the House and the citizens of this State to be absolutely clear about it is that Nama is not designed to be and will not be permitted to operate in practice as a bail-out mechanism for anybody who has operated irresponsibly,” he said.
“In relation to those who took out these development-related loans, the agency will continue to treat them as borrowers who continue to owe the full amount of their loan,” he said.
Mr Cowen called alternatives to Nama proposed by Fine Gael “unrealistic” and “not founded in any practical plan”.
“The suggestion by Deputy Bruton that we can divide most or all of our banks into a good and bad bank system without disrupting the flow of finance to the economy is totally unrealistic and not founded in any practical plan.
“If as suggested, all or most of our banks were to be put into a bank resolution scheme, we would be left for a significant period with zombie banks and very little lending into the Irish economy,” he said.
He said suggestions the financial system’s problems would disappear if the banks were nationalised were “patently untrue”.
But Fine Gael leader Enda Kenny said Nama was a “fatally flawed" piece of legislation. He told the Dáil this morning it was the “economics of the madhouse, supported by the fiction of long-term economic value”.
He added: “The Government keeps telling us that Nama is not a bail-out for the bankers. In fact, the Taoiseach gets quite annoyed when we talk about bail-outs. Then perhaps he could explain why the share price of AIB is up 25 per cent this morning? And the share price of Bank of Ireland is up 16 per cent. Isn’t this a clear sign that the banks have got a great deal at the expense of the taxpayer?”
Mr Kenny said the “really sad thing” was that the Government actually believed what they were saying about Nama.
“They are so cut off from the real world that they have ended up swallowing their own fictions. When he looks in the mirror, Brian Cowen probably sees a man who is doing what he thinks is right. The rest of us see a man whose policies helped destroy our economy. A man who refuses to apologise. A man who keeps making the same mistakes,” he said.
Mr Kenny said Nama was an appalling solution to an economic collapse overseen and orchestrated by Fianna Fáil. He called on the Taoiseach to put the national interest before his party’s political interest. “If you cannot do that, it really is time for you to go,” he added.
Labour leader Eamon Gilmore said Nama was "nationalisation by a scenic route". He told the Dáil the agency was “the wrong fix for a crisis that should never have happened” and called it a scheme to nationalise losses and privatise profits.
“It is a scheme that exposes the state and the taxpayer to unnecessary and excessive costs and risks. It is a scheme that will undermine the competitiveness of the Irish economy for years to come,” he said.
“Last week, was ‘risk-sharing’ week. A big victory, we were told, had been won by the Green Party. What do we get in the Minister’s statement. Risk-sharing will be 5 per cent - as small as it could possibly be. The so-called risk-sharing is nothing more than a puff of green smoke,” he said.
Mr Gilmore said Labour's suggestion of temporarily nationalising AIB and Bank of Ireland avoided the risks involved in the valuation of loans, and gave the taxpayer the prospect of sharing in the benefits of a revived banking system. He accused the Government of going to “to extraordinary lengths" to avoid public ownership in the national interest.
Sinn Féin's Caoimhghín Ó Caoláin described Nama as a “bailout for the greediest and the most corrupt in Irish society” and called for nationalisation of the main banks and the development of a State bank.
“There is no doubt whatsoever about who Fianna Fáil and the Greens are serving with this rotten Bill. It is a bailout for the greediest and the most corrupt in Irish society – the bankers and the speculators whose boundless avarice has devastated the Irish economy."
He said Nama had nothing improving Irish society and was about socialising debt and privatising profit.
Green Party leader John Gormley told the Dáil the mess the country found itself in was “created by the greed and stupidity of a minority of people involved in banking, in land speculation and in building developments.”
He said whatever remedy was chosen to get out of the crisis would be extremely expensive and unfair to Irish workers and Nama was the “least worst” option.
“Throughout these months of Government deliberations, we in the Green Party have stressed that the solution we choose must be the least expensive and the least unfair option for the Irish taxpayer,” he said. “I would not be standing here before you if I did not believe that we are on our way to finding that least expensive and least unfair option.”
He said the Green Party had “never ever” been a friend of bankers or builders and would never co-operate with an effort to bail them out.
“We see this initiative for what it is: a stimulus for the Irish economy mired in crisis; an effort to get money flowing back to business; a move to save existing jobs and create new jobs.”