Gormley criticises Opposition plans
Opposition party proposals on the financial crisis have come under attack from Minister for the Environment John Gormley in advance of a Green Party meeting in Athlone on the proposed National Asset Management Agency (Nama).
Several hundred members are expected to attend tomorrow's meeting which will discuss the party’s approach to Nama, particularly in the light of changes to the legislation announced this week. A further meeting is to be held on October 10th.
“If you look at the proposals being put [forward] by the Opposition, they don’t add up,” Mr Gormley told a news conference today.
“The Fine Gael proposals have been severely criticised by Garret FitzGerald and Alan Dukes. The Labour Party proposals have no costings: they propose a new body known as ART — the Assets Recovery Trust, which is, as far as I can see, Nama by another name, and then they propose nationalisation.
“And I don’t see how the Opposition parties proposals actually protect the taxpayer. In fact, the cost to the taxpayer is probably more when you look at nationalisation."
Labour leader Emmaon Gilmore told the Construction Industry Federation Conference that the party had been developing proposals for a State Investment Bank, which would be run "at arms length from Government", but would have a "mission" to support investment in areas where high-street banks do not function. Labour's measures include a commision to oversee appointments to boards of banks and major changes to the rules on corporate Governance, including the restriction of cross-directorships.
Looking ahead to next Wednesday’s announcement in the Dáil on the value Nama will put on the loans it is taking over, Mr Gormley said: “We will be able to gauge very quickly at that stage, the valuation methodology and the extent to which risk-sharing is going to protect the taxpayer, so there is quite a lot to be discussed."
Earlier today Mr Gormley conceded the Government is losing the trust of the electorate over the establishment of Nama.
In an interview this morning, the Minister for the Environment said there was “a problem with trust in relation to this Government”, noting that the latest polls saw the Coalition enjoying a satisfaction rating of just 11 per cent.
“It’s understandable that there is that lack of trust there but we do really have to look at what Nama is about.”
Mr Gormley said some development land is now “worthless,” citing a review of zoned land undertaken by officials at the Department of the Environment. He said the process of valuation was “undoubtedly difficult” but he was “very confident” Nama would not pay developers over the market value for their assets. “If it’s worth nothing, they’ll get nothing, it’s as simple as that.”
He also rejected a claim by Labour Party leader Eamon Gilmore that Nama would be a bailout for developers. “If it were … I wouldn’t touch it with a bargepole,” he told RTÉ’s Morning Ireland. "They will be pursued for every penny that they owe."
He said his party had secured the amendments to the Nama Bill that it had sought and would continue through committee stage in the Oireachtas to seek "even more amendments".
On Wednesday, the Greens claimed credit for significant changes to the Nama Bill, including a risk-sharing mechanism between the agency and the banks and an 80 per cent windfall tax on developers designed to prevent land speculation in the future.
"I know there are fears out there," he said. "This whole debate is essentially about trust. If you look at the United States and what Barack Obama has done over there, he has given the banks a very, very good deal indeed yet he's also come out against nationalisation. He is trusted because he is Barack Obama.
"The problem we have in this country is that people don't trust."
He said a bank recapitalisation may be more expensive than the Nama proposal. “This is about injecting a stimulus into the Irish economy through a very good deal with the ECB,” Mr Gormley said. “If we go down the route of recapitalisation, that is going to cost the taxpayer... Those people that are concerned, and rightly concerned, are concerned about the cost to them."