FINE GAEL has strongly defended its opposition to the National Asset Management Agency (Nama) in the face of a warning from former taoiseach Garret FitzGerald about the dire implications of the Opposition defeating the legislation in the Dáil.
Dr FitzGerald, a former Fine Gael leader, said he was concerned that rejection by the Dáil of huge spending cuts and tax increases in the budget, as well as the Nama legislation, could leave the State vulnerable to intervention by the International Monetary Fund (IMF).
But yesterday Fine Gael said that neither the party nor its finance spokesman Richard Bruton shared Dr FitzGerald’s analysis.
The party spokesman said that as an “independent commentator” Dr FitzGerald was more than entitled to express his views, but they were not views shared by 46 other independent economists as published in last week’s Irish Times.
“Fine Gael has taken a very responsible approach. We supported the bank guarantee scheme. We highlighted problems with the Government backing Anglo Irish Bank. We also published our alternative banking solution in April this year.
“We do believe that there is a better alternative than Nama and Fine Gael’s good bank-bad bank is that alternative,” he said.
In his Irish Timescolumn last weekend, Dr FitzGerald contended that the three-month period ahead was crucial and that failure to implement the two key measures would undermine the State's capacity to "borrow the huge sums" necessary to recover from the crisis.
“The Opposition parties should be the first to recognise this. No worse fate could befall an Opposition than to precipitate themselves into government by defeating measures, the rejection of which could throw our State into the hands of the IMF,” he wrote.
He said he did not think it safe for there to be a change of government until the Nama legislation had been passed and the budget implemented. He also noted that Fine Gael had said it would vote against the Nama Bill and that Labour’s stance seemed recently to have hardened.
Minister for Finance Brian Lenihan is expected to intensify his attack on the Fine Gael proposal when he appears before the Oireachtas Committee on Finance this afternoon to discuss Nama.
However, the Fine Gael spokesman said that it was willing to defend a position that was always going to attract supporters and detractors. “If Fianna Fáil want a fight on Nama every day between now and Christmas we will do it. We are not persuaded on Nama. It’s the wrong approach in our opinion,” said the spokesman.
The key issue that is expected to dominate the committee’s proceedings today is the process to calculate the value of the bank’s assets and the percentage of discount, or “haircut”, that will be applied by the agency.
In addition to senior officials, the independent expert on property valuation hired by Nama, John Mulcahy of Jones Lang LaSalle, will attend.
Mr Lenihan said that the State was prepared to take a majority stake in one of the banks if necessary, but again emphasised his opposition to “pre-emptive nationalisation”.
In an interview with the Sunday Business Post, Mr Lenihan said that if the write-offs by the banks required a significant injection of capital from the State, then it was prepared to accept 50 per cent or more of the shares. But he he asserted that nationalising the banks would compromise the ability to find funding on international markets.
