I attended some of the Green Party seminars on NAMA where many concerns and suggestions were raised by members but how many of these concerns have been implemented in the current NAMA legislation?
Where there is a clear view within the party that the amendments do not go far enough, it is not good enough in my opinion to vote through the NAMA Bill without clearly explaining to members why:
a) their principle objections or recommendation cannot be facilitated
b) why alternatives will not work
c) why the proposed bill is the best we can deliver
This did not happen at the Green Party Convention last week. No written information or evidence was presented by the party to outline the Government of Green party elected delegates views.
I do not agree with the opinion that by voting against the Bill at the Green Party convention it would bring down the Government. The Bill could have been delayed to facilitate changes to the legislation, a revised Bill could have been voted on as with the Lisbon Treaty with guarantees written into the legislation to support current market realities and the views not just of the Green Party members but also some of the observations of the main opposition parties and many independent economists.
Clearly FF would not have presented the Bill for voting this week where they knew it was going to fail. In reality the Bill (as with the Lisbon Treaty) has to get as much as possible all party agreement to get the public to buy into what is in effect the most significant legislation to be brought before the houses of the Oireachtas in decades. After all it is the public the taxpayer who will be paying for this as they do the salaries of all Oireachtas members.
The outcome of the Green Party meeting in Athlone earlier this summer is os some significance in this debate, it is a fact that only 13 per cent of the attendance at a Green Party conference expressed support for the legislation in its current form, the Nama Bill in its current format came in fourth out of six options placed before Green Party members in Athlone. So what is new in the legislation to reflect this?
The majority of members opinion was that NAMA should pay only the current market rate for loans transferred to the banks yet this has not happened.
The general consensus by all commentators is that NAMA should only apply to credit institutions of systemic importance to the economy. This is my own belief and interestingly one should note the intended purpose of the NAMA legislation itself as stated in Section 2. Part (iv) is “to facilitate restructuring of credit institutions of systemic importance to the economy”
Section 55 part (1) outlines how the Minister will select which financial institutions should be covered by the NAMA legislation. It states that the Minster can designate a credit institution where the Minister is satisfied “the credit institution is systemically important to the financial system in the State”
Neither the green parliamentary party nor the Minister for Finance nor the Government have explained to anyone why Anglo Irish Bank and NIB are systemically important to the financial system in the State.
I do not believe they are and I am not alone in this view.
Further the NAMA business plan presented today raising serious concerns regarding the risks associated with this legislation.
The NAMA business plan estimates an approximate 47% average decline on an aggregate portfolio basis including the impact of declines in overseas markets.
In order to estimate the aggregate current market value of assets to be acquired, it is necessary to estimate the decline in value of the underlying property collateral since the loans
Where this is examined in regard to many large developer loans it is clear that this figure is absolute nonsense. The 85% crash in asset value of the former glass bottle site in Dublin should indicate the real world depreciation that is now evident in the market place.
The courts yesterday reported how EBS are suing three well known businessmen for not paying the interest or loan repayments on a site they purchased in Cork in 2007. This debt will be included in the NAMA loan books. I know this site very well and would be of the opinion that it wold now be valued at approximately €5 million which would support the 85% devaluation in property that occurred with the glass bottle site in Dublin.
We have current hard evidence to show that NAMA valuation is clearly nonsense and furthermore where this is evident the projection in the NAMA business plan of a 15% uplift on the current market value of the collateral of loans identified for transfer is absurd and balderdash.
To add insult to injury the NAMA business plan projections assume that, of the €77 billion nominal value of loans acquired, €62 billion will be repaid by borrowers. This will never happen. Its time for a urgent injection of realism within the political establishment.
My suggestion to the Green Parliamentary party is that they demand that the Minister for Finance must outline why Anglo Irish Bank and NIB are systemically important to the financial system in the State, this is what needs to be done and undertaken urgently in a transparent and proper fashion.
Explain to the members of the Oireachtas and the public why both these institutions cannot fail?
They already have so why put public money which a) we don't have and b) is badly needed elsewhere, into two institutions that are corrupt and will never give a return on the investment.
Such an act could damage the State and our economy irreparably.
Where these institutions are not seen to be of systematic importance, as I believe is the case, they should not be designated as institutions that will benefit from the NAMA legislation.
Posts
No comments:
Post a Comment