Taoiseach defends Nama proposal

 

Taoiseach Brian Cowen has defended Nama against criticism from all the Opposition parties, saying it was being established on the best international advice.

Speaking in Tullamore, Co Offaly Mr Cowen said he did not have any problem with the Green Party holding a conference to discuss the Nama Bill.

“Every organisation, everyone who has an interest in the country, will want to have a debate about it: we produced the draft Bill precisely for that purpose,” he told reporters during a visit to Fleadh Cheoil na hÉireann last night.

Commenting on Fine Gael leader Enda Kenny’s declaration earlier yesterday that his party would vote against Nama, which he described as a “double or quits” gamble by Fianna Fáil, the Taoiseach said: “Glib one-liners aren’t the way to deal with what are very difficult and complex questions.

“The proposal we have brought forward is on the basis of the best international advice, including the European Commission and the International Monetary Fund, and we are doing this in consultation with the European Central Bank.”

Mr Kenny had described Nama as fundamentally unfair. “It transfers the responsibility for dealing with toxic loans from the banks who made them, and the investors who funded them, to the Irish taxpayer,” Mr Kenny told the Humbert Summer School in Castlebar, Co Mayo.

He said Fine Gael’s solution was to create a “good bank”, with a credit facility of up to €20 billion, called the National Recovery Bank, which would get credit through an initial Government injection of €2 billion and the sale of good loans to the European Central Bank. This bank would need about 50 staff with the right qualifications. It would not have its own retail network. Instead, it would subcontract the existing banks to run its loan book.

Mr Kenny said the existing banks would be restructured to place the risk with the shareholders and the bondholders. They would be nationalised if they were not fit for purpose by September 2010, when the bank guarantee scheme runs out.

The Labour Party and Sinn Féin yesterday reiterated their support for nationalising the banks and said they would oppose the Nama Bill in the Dáil.

Labour Party deputy leader and spokeswoman on finance Joan Burton said nationalisation was the safest policy as it would not require early valuations to be placed on the transfer of loans. The Nama Bill was flawed by the section referring to long-term economic value which was designed “to pay way over the odds for the banks’ dodgiest loans on the pretext that the assets so acquired have an enduring value that is not reflected in the current market”.

Sinn Féin finance spokesman Arthur Morgan said Nama was such an important issue for taxpayers and future generations that it should be put to a referendum.

The Green Party has decided to hold a special conference on Nama following the decision of a fifth constituency organisation to table a motion on the issue. The move by the Tipperary South branch follows similar actions from the Dublin South Central, Dublin Central, Kerry North and Waterford branches this month.

A Green Party spokesman said the national executive had taken a decision to hold a conference to discuss Nama on September 12th before the issue was debated in the Dáil, but the conference would not be a decision-making one. A final decision would be made at a convention in October which would consider the outcome of the review of the Programme for Government with Fianna Fáil.