OTHER REACTION:FINE GAEL last night questioned the validity of some of the fundamental assumptions underpinning the Nama scheme outlined by Minister for Finance, Brian Lenihan, in the Dáil.
The party’s finance spokesman, Richard Bruton, said very different figures had emerged during the Minister’s speech than had been bandied around by the Government in the past few weeks. He accused the Government of spinning and expectation management.
In particular, he claimed the loan-to-value ratio was much higher than the 70-75 per cent suggested by Government spokesmen in recent weeks. He said the figures supplied by the Department of Finance yesterday suggested it was as high as 88 per cent.
Mr Bruton said that when rolled-up interest of €9 billion was included in the equation, the loan-to-value was 12 per cent higher than the 77 per cent figure produced by the Department of Finance yesterday.
Fine Gael said that its first, cursory examination of the documentation had unpicked some other major assumptions. It questioned the assumption that there was a realistic prospect of high yields on commercial property.
“Some 30 per cent of commercial property in Dublin is vacant. To suggest that yields will return to some kind of level of normality does not stand scrutiny,” a spokesman said.
Mr Bruton also said the Green Party’s claim that it won concession on risk-sharing of 50 per cent looked very thin indeed when Mr Lenihan announced that risk-sharing would only apply to 5 per cent (or €2.7 billion) of the €54 billion paid for the loans.
“It’s hard to see the influence of the Green Party in Nama; the 30 per cent discount is far lower than the junior Coalition party had led us to expect. Their commitment for a 50/50 risk-share arrangement has resulted in 5 per cent risk-bearing bonds for the banks.”
Labour’s f’inance spokeswoman, Joan Burton, was scathing in her criticism of the culture that allowed Anglo Irish Bank and Irish Nationwide to run up such high levels of toxic loans.
“Anglo Irish, with €28 billion of loans, and Irish Nationwide, with €8 billion, account for almost half of all the toxic loans,” Ms Burton said. “The tragedy for the country is that a bank like Anglo Irish Bank, which is a developers’ bank and not of systemic importance, is allowed to grow to extraordinary levels and allowed to imperil [the economy],” she said.
She also dismissed as “pure smokescreen” Mr Lenihan’s criticism of Labour’s nationalisation plan during the course of his speech to the Dáil. “It is false and misleading, and is not based on what Labour proposed.
“The so-called estimate is based on an assumption of a ‘blanket’ nationalisation of the banking system. Labour did not propose ‘blanket’ nationalisation; we proposed only the temporary nationalisation of AIB and Bank of Ireland – the two banks of most significance to the functioning of the real economy,” she said.
Sinn Féin leader Gerry Adams, who watched the debate from the Dáil’s distinguished visitors’ gallery, said he supported the intervention by Arthur Morgan that resulted in the Louth deputy being asked to leave the chamber.
Mr Adams said Sinn Féin would do everything in its power to oppose the legislation. “It is incumbent on every Opposition party to express their opposition to Nama, which will cost approximately €12,000 for every man, woman and child if it is allowed to be pushed through,” he said.
Socialist Party MEP Joe Higgins said: “The self same banks being bailed out for their reckless lending to greedy speculators and developers will show precious little consideration to ordinary householders who fall behind on mortgage payments,” he said.