Olivia Mitchell (Dublin South, Fine Gael)

Sometime during the summer when the real depth and extent of what was being planned began to dawn, the Government must have been taken aback at the depth and bitterness of the opposition to NAMA. Its representatives tried to explain it away as oppositional politics or a failure to understand what was being proposed. However, it is neither. People understood and understand very well what is being proposed. They know what has happened. They understand that our banks are effectively bankrupt. They know that thanks to their reckless lending into a property bubble their balance sheets are absolute rubbish. They know their assets are propped up by the ECB to the tune of €130 billion. On the liability side, their deposits and bonds are guaranteed by the Government on behalf of the taxpayer. They also know these artificial life supports cannot be left switched on indefinitely. They also know that if either of these supports, on the asset or liability side, is removed then the entire shaky edifice will come tumbling down, and bring down with it the aspirations of this generation and probably the next one also.

They also know that however galling it may be to them we must rescue the banks, they cannot be allowed to collapse. They know we need to keep credit flowing in the economy and that we need a modern functioning financial system. They also know that the solution, whatever it may be, will be risky and expensive. While the figure changes daily, we have at least €90 billion in outstanding property loans. We have not paid too much attention to outstanding personal debt, but I hear from the banks that personal bad debts are at least as high as commercial bad debts. If the economy is to recover, it will not be from a consumer boom. It would make me wonder just how clean bank balance sheets will be, even after we have given them these billions of euro. The cost of cleaning up the bank loan books, while still unknowable, is certainly huge.

The public accept that no matter what course of action is taken to rescue the banks, there will be risks attached. There are risks with our solution, the Labour Party solution and the NAMA proposal. We cannot remove risk but we can and must ensure the risk is shared. The public do not understand why they must take all the risk of the bad loans while the banks which made those loans and the investors who funded them, are protected. Is it not the very nature of an investment, of risk taking, that good investments make money and bad investments lose money? With the Government's proposal, that principle, that eternal truth since people started trading, has been turned on its head. The banks and those from whom they borrowed for years made successful investments that paid off handsomely. However, when they made bad investments, when they went over the top in reckless lending, the tab is to be picked up, not by those who made the investments but by the taxpayers, their children and probably grandchildren.

With that kind of cushion, that kind of safety net, who would not be a bondholder or a banker? It is the most wonderful profession to be in. If we pick up the tab for the banks in the way that is proposed, what is to stop them picking themselves up and starting all over again? If there is not some pain for the reckless lending, no lesson is learned. The incentive for caution, prudence and responsible liquidity ratios must be at the heart of all banking and risk taking. The Minister told us there would be pain for the banks and that NAMA would not overpay for assets. Of course it will overpay for assets - that was the whole purpose of NAMA. If it does not overpay for bank assets, the banks may as well sell them at the going rate, whenever or wherever they can.

For the banks there is no pain, no penalty, in taking the long-term economic value and discounting it to present day values, if one assumes as the Government does - regardless of what it claims - that property prices will resume their upward trajectory. To be given the future value of an asset in the current economic climate is a sweetheart deal. Every unfortunate house owner who is now in negative equity or anyone trying to sell a house at the moment would love that deal. They would love the long-term economic value of their house but they will not get it. That will only be available to the banks.

The Green Party, recognising just how this deal is sticking in the craw of every right thinking person came up with what is called risk- sharing - the issuing to the banks of some subordinated bonds. As far as we can gather very few will be issued, but no doubt that could lessen the loss. However, to call that risk sharing is either to mislead or to misunderstand what is meant by risk sharing. Any financial investment carries risk, which involves the possibility of gain as well as loss. NAMA offers no possibility of gain to taxpayers. The subordinated bonds may lessen the loss, but will not give them any possibility of gain. In the short term there will be no increase in the flow of credit, and in the longer term, assuming the banks survive - which is by no means certain - and prosper again, the taxpayer will have little or no share if the Minister has his way. It is strange that the Minister maintained all along he would not over-pay, yet today he is defending the proposal by saying it is in the national interest and he has no alternative.

If proof were needed that taxpayers will pay too much for these assets, it is the obscene and unapologetic clamour by the banks during the summer to offer further millions to Zoe Developments, just to nurse it along so that it can avail of NAMA, when we will all pay to bail it out. To copper-fasten the view of what a charmed deal the banks were getting - this drove people demented - a Canadian bank expressed an interest in purchasing AIB, but of course after the establishment of NAMA, when it would have got rid of its rubbish balance sheet and its bad debts. Who would not buy it then? If the remaining good banks are good enough for other buyers, why are they not good enough for the Irish taxpayer? If NAMA is to go ahead - presumably the Greens will let us know at some point whether it will go ahead - then the haircut should be severe enough to reflect reality.

If the taxpayer is footing the bill for all this, it should be by recapitalising on the basis of an equity stake in the banks. Then at least we will own what we are paying for many times over. I do not understand why the Government is so reluctant to take a bank shareholding. Other governments have done so. I am not talking about banana republics: the UK Government, for instance, now owns 70% of Lloyds Bank, that bastion of capitalism, and the shutters have not come down. The world did not end. Of course it is possible, and other governments are doing it. Why, for God's sake, has the Government bought the totally banjaxed Anglo Irish Bank and taken a full shareholding in it, while it shies away from even partial ownership of banks that might recover and repay the taxpayer?

The truth is that it has been led by the nose by bankers since August 2008. It got their version of the problem and it got their preferred solution, and that has dictated everything that has happened since and everything that is planned. It is time to stop listening to the banks and start considering alternatives. The Government must look at the issue from another perspective and think of the taxpayer. There are other ways of dealing with this problem and even of handling NAMA. I plead with the Minister not to gallop down the path he has taken simply because he has started down that path.

The legislation for NAMA sets out seven objectives, but it cannot achieve any of them. It will not get credit flowing, which is ostensibly the whole purpose. It does not protect taxpayers' interests - indeed, the Government has failed utterly to protect taxpayers' interests. We have put billions of euro in already and it has disappeared down a black hole. It may be years before we realise the full cost of NAMA to the taxpayer - although we will see quickly that credit will not start to flow - by which time the Minister and other Ministers may be gone. It is a shocking legacy to leave behind and not one the Government or Ministers want, but there is still time to avoid that legacy.

I wish to speak about the content of the legislation and what is not contained in it. One of the things that bothers me is that there is nothing in the Bill to protect the taxpayer's interest when there is a conflict of interest between how the bank manages its loans and how it manages NAMA's loans. There will be a conflict of interest in this regard, but there is no clarity about how the taxpayer will be protected. The banks will run rings around us, as they have done before. Nor will they be nearly as robust in collecting debts for NAMA as they will be in collecting their own debts.

I am sorry there is no member of the Green Party here. This party produced a wonderful concession that it wrung from the Government, namely, that it would be an offence to write a letter to NAMA. It is a complete joke to make that an offence, as if NAMA needed protection from the public. The reverse is true. This legislation is giving it enormous powers, beyond anything we have ever given to an organisation, with public interest not involved. There is no accountability; the Minister can increase its powers and allow it to do almost anything. There is no protection for the public whatsoever. If the public cannot write letters to NAMA, who can make representations to it? Who can tell it what is happening on the ground? It is essential that the powers of the Minister and of NAMA are totally vested in the Oireachtas. That is an important part of the legislation.

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