The publication of draft legislation on the new National Assets Management Agency (Nama) has done nothing to ease fears that the taxpayer will be asked to pay too much for banks’ toxic loans, Fine Gael said.
Finance spokesman and deputy leader Richard Bruton said the legislation was asking taxpayers for “an enormous blank cheque” and that it was an “enormous gamble” by the Government on bankers, developers and the future of the Irish property market.
“Huge risks are involved. Very little independent oversight is being offered. Can we afford decisions to be based on the opinion of those who, until recently, were telling us that the property bubble was based on sound economic fundamentals?”
“The central concern with Nama has been the worry that taxpayers will be asked to pay too much for these toxic loans. That concern has not been eased by this legislation.”
Mr Bruton said the Bill provided “a very elastic concept of ‘long-term value’ as the basis for valuing the impaired bank loans. The Minister [for Finance] will have very substantial powers as to how this will be estimated.”
He said the Bill provided “nothing new” on the oversight of the “extraordinary” agency, other than the standard accountability of any body to the Oireachtas Finance Committee and the Public Accounts Committee. It also made no provision for risk-sharing mechanisms recommended by the International Monetary Fund, he said.
Labour Party spokesman Ruairi Quinn said his “initial reaction” to the Nama Bill was that “Fianna Fáil is proposing to establish the biggest property company in the world and asking taxpayers to foot the bill and bear all the risk”.
“This Bill will be one of the most important pieces of legislation ever to have come before Dáil Eireann. There will be enormous consequences for the taxpayer if the government get it wrong. It is a hugely complex Bill that will require careful study and the Labour Party will examine it in a responsible way. We will issue our detailed response in due course.”
Mr Quinn said the key element missing from the draft Bill was a precise figure on how losses on loans, many of which relate to property developments abroad, are to be apportioned between the taxpayers and the banks.
The relevant section was “hopelessly vague”.
Sinn Féin finance spokesman Arthur Morgan said the Government and the banks had perpetrated the “crime of the century”.
Mr Morgan said: “Every euro of the €10 billion already pumped into Anglo, AIB and Bank of Ireland on top of the astronomical cost of Nama is a euro being taken out of vital public services such as education, health, job creation and the delivery of critical infrastructure. And the weight of debt on future generations is as yet immeasurable.”
He said the legislation gave the Minister sole power to appoint members of Nama and that this should be a "cross-party decision”. Mr Morgan added that the legislation did not set out the loan book discount for the taxpayer and that the omission showed that “the government would rather overpay for these assets rather than take a recapitalised stake in the banks”.