Brian Cowen (Laois-Offaly, Fianna Fail)

Yesterday the Minister for Finance outlined the details of the NAMA legislation. I thank him, his staff and advisers, as well as the Attorney General and his officials, for the huge volume of work they have put into the Bill. I also thank the Cabinet for its input and guidance, as well as those who have offered many constructive suggestions.

As many have commented, this legislation is one of the most important economic Bills to come before the House since independence. Therefore, it is vital that it is debated thoroughly, not only in order that Deputies can have their say but also in order that the taxpaying public can understand with clarity the decisions we propose to take on their behalf.

I want to spend a moment outlining to the Dail and the people the context in which this is happening and the role the Bill plays in the Government's overall strategy for recovery. As everyone knows, we are going through difficult times. However, we cannot be blinded by the difficulties and we must have courage. We must act. We must take the future into our own hands and not wait until fate decides it for us. Doing nothing is not an option. We must move on. During this critical period for the country I want the people to know that we can take actions to improve our situation and increase our chances of returning to prosperity. We intend to take those actions.

Between now and Christmas the country has the opportunity to take three steps that will lay the foundations for recovery. These steps are the passing of the Lisbon treaty to give us a stronger and more efficient European Union with Ireland influencing and shaping events that affect us; the setting up of the National Asset Management Agency which will help to solve the banking crisis; and the passing of a budget which will continue the process of putting the public finances back on a sustainable footing in the coming years. It is my belief and that of the Government that these three measures will position Ireland to benefit from the recovery we are beginning to see in other countries far sooner than would otherwise be the case. Of course, it is difficult but we must confront the scale of the problems and be confident that together we will pull through for the sake of the country's future prospects. It is also my strong belief that by not passing these three measures we would be condemning ourselves to a period of stagnation, isolation and further deterioration in our economic circumstances. Let us proceed with determination and the courage of our convictions that we will all do what is necessary now to secure our economic future.

On all three issues, the Lisbon treaty, NAMA and the upcoming budget, there is one sole motivation guiding the Government, namely, to return the country to growth as soon as possible for the benefit of us all. These issues cannot be resolved in isolation. In tackling the issues facing the economy, the stabilisation and cleansing of our banking and financial system is not optional. It is a must. To protect jobs we need an economy that is growing. An economy cannot grow without a properly working banking system. After careful consideration of all the options, we believe establishing the National Asset Management Agency is the best solution to the banking crisis that Ireland faces. By establishing the agency the Government is tackling head on the significant threat impaired assets pose to the Irish financial system. The asset management approach has a proven track record internationally and the establishment of NAMA has been supported by institutions such as the IMF and the European Central Bank, as well as by the financial markets. Deputy Bruton stated last night that the ECB had recommended paying the market price for assets. This is not true. It recommended that we avoid paying too great a premium over the market price. As the Minister pointed out yesterday, the Governor of the Central Bank, Mr. John Hurley, and the incoming Governor, Professor Patrick Honohan, have both stated that, having regard to the uncertainty in property price movements, the proposed add-on of 15% to 18% to the estimated current market price does not seem out of proportion with the range of potential upward price movements, especially when a risk sharing element is included. I am absolutely certain that the proposed premium over market price is in the best interests of the economy and, consequently, those of the taxpayer.

Last night the Minister outlined in significant detail how NAMA would operate. I would like to address some of the key points of NAMA's operation, while also setting out the broader context for this initiative. Members of the House should be familiar with the context for this debate but judging by some of the contributions yesterday it is worth reminding ourselves of the events of the past 12 months. As a consequence of international developments and our own domestic factors, the need for extensive Government support and protection for the Irish banking sector became clear. During that period, Governments and central banks across the globe have provided substantial support to the financial sector and the broad economy in their management of this global crisis.

I want to highlight the importance of a functioning banking system to the wider economy and the steps the Government has taken to promote lending. Promoting lending to the small and medium-size enterprise sector is a high priority for the Government and a number of initiatives are already under way to support viable but vulnerable businesses.

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