Fine Gael banks plan is 'cumbersome', says Dukes

 

Ex-Fine Gael leader Alan Dukes has labelled his former party’s solution to the banking crisis as “cumbersome”.

Speaking today Mr Dukes described the Fine Gael plan of creating recovery banks as “very cumbersome, very doubtful of success and much less clear than the Nama [National Asset Management Agency] proposal.”

Mr Dukes said he had “grave doubts about the feasibility of the [Fine Gael] proposal”.

He is the second former Fine Gael leader to criticise the party’s stance on Nama after former taoiseach Garret FitzGerald warned of dire implications of the Opposition defeating the legislation in the Dáil last week.

Mr Dukes - who was appointed to the board of the nationalised Anglo Irish Bank by the Government - told RTÉ’s This Weekprogramme that Nama is the “best of the proposals on the table”.

“The Nama proposal in itself has big questions hanging over it because of the nature of the problem. We don’t know whether we’ve hit the bottom of the property market yet, we don’t know how long it will take to recover and we don’t know how far it will recover.”

Mr Dukes also criticised the Labour Party’s proposal to nationalise the banks. “Having the three major banks in the country nationalised would create very very difficult problems for any government.”

“When the time came to float there would be an enormous political row about what they are worth and what they State should get for them . . . I think it would create a whole set of new problems.”

However, speaking on the same programme, Labour leader Eamon Gilmore defended nationalisation and said it is “the only sensible option to pursue to get our banks cleaned up and get a functioning banking system working again for the country”.

“The risk for the taxpayer is reduced, and secondly the taxpayer has something to gain when the banks are restored to good order.”

Mr Gilmore said that Nama is the most “expensive and risky route” and that his party would be publishing a detailed critique of the Bill later in the week.

In a statement today, Labour spokeswoman on finance Joan Burton said she had written to the Minister for Finance, questioning the legal and constitutional aspects of the Nama Bill.

Referring to Section 58, the section of the Bill which deals with valuation, Ms Burton said: “According to the section, the concept of ‘long-term economic value’ is defined as the value that the property can reasonably be expected to attain in a stable financial system when 'current crisis conditions' are ‘ameliorated’ and in which a future price or yield of the asset is consistent with reasonable expectations having regard to the long-term historical average.

“‘Current crisis conditions’ is not defined in the Bill," she said, adding: "the basic question arises as to whether ‘current crisis conditions’ means the conditions prevailing at the time the Act is passed or whether it means the conditions then prevailing at any future time when the Act has to be construed and interpreted by a court at a future date.”