Mary White (Carlow-Kilkenny, Green Party)

Nothing could be more important than the stabilisation of the banks. This is so vital for our economy, our retail and business world and we have got to get it right. We have an opportunity now to do just that.

I believe that the approach the Government is taking to treat the significant level of toxic debt in the banks is more sensible than nationalisation, as proposed in the Labour Party motion. The NAMA will have effective control of the banks in terms of the tidying up of the bad debt and in that regard what is being proposed serves the same purpose as nationalisation. The safeguards proposed for the legislation will ensure that the banks will have to comply with the NAMA in terms of what the agency will be doing.

The NTMA has a proven track record and much experience in dealing with debt and I believe can be trusted, if the preparatory work is done well. The Labour Party says that part of the case for nationalising the banks is the danger of the State having to value bad loans, but the agency which will act on behalf of the State will have the competence to do this. By allowing the NAMA to take over the land and development books of the main banks, the management of these debts will be undertaken in a controlled environment, which will ultimately allow the banks to attain a sound footing quicker than by internal management of the debt through State ownership. Furthermore, I am confident the safeguards the Government has put in place in relation to banking measures over the last nine months ensure that the taxpayer gets best value for money from these stabilisation measures.

With the NAMA in the picture, market value will be brought to bear on the value of the toxic loans as well as the provision for a levy to be imposed should the agency incur losses on the debt. With the State guarantee a fee income of approximately €1 billion will be generated, and with the recapitalisation there is the annual dividend of approximately 8% return on the preference shares, with a return of 125% of par value if preference shares are not redeemed within five years.

It is important at such a sensitive time to say that no blank cheque has been written for the banks, no touchy-feely deals have been going on and no-one is playing footsie under the table to give the banks more leeway. In no way can the banks skip the light fandango out of town. There are real measures here to improve the economy.

Two related issues concerning the stabilisation of the banks should be noted. The significant amount of development land at issue regarding the NAMA will have to be considered as planning policy is developed in the coming years. We are talking about major tracts of land. Central and local government will have to ensure rezoning and other planning matters take account of the scale of land now available, and learn lessons from the irresponsible policies which encouraged the overvalued purchasing of it. I am confident that the Green Party reform of planning and local government will address some of these measures. We never took the developers cheques or donations, so our hands are clean on this.

The stabilisation of banks must come in tandem with the release of urgent credit to struggling small and medium-sized enterprises across the country. That is why we are doing it, to get the money flowing and put the economy on the right track. Debt evaluation must be decoupled from personal debt, mortgages and businesses. The latter must be given the bridging loans, overdraft facilities and capital they need to survive. This is the crux of the matter. Businesses are hurting in the market place. The sooner the NAMA becomes operational and banks can lend to businesses, the sooner those longed for green shoots for economic recovery will begin to sprout.

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