Enda Kenny (Mayo, Fine Gael)

In a few weeks the people will vote on the Lisbon treaty. This party believes passionately in the interests of our country and for that reason we have set aside any narrow political considerations in campaigning actively for a "Yes" vote. Let me be clear. With the same passion and sense of conviction we believe that the NAMA proposal is not in the national interest and that is why we are voting against it. This is not just a flawed item of legislation. It is the economics of the madhouse, supported by the fiction of long-term economic value.

The Government keeps telling us that this is not a bail out for the bankers. In fact the Taoiseach gets quite annoyed when he hears talk of bail outs. Perhaps the Government, then, should explain why the share price of AIB is up 25% this morning and the share price of Bank of Ireland is up 16%. Is that not a very clear sign indeed that this is a great deal for the banks at the expense of the taxpayer?

Since the beginning of this year there has been a massive transfer of wealth from the taxpayer to the financial markets. The State has guaranteed the banks and pumped €7 billion into the system. The result is that since April senior bank bonds have increased in value by about 20%, subordinated bonds have increased by 50% and shares that were worth ten cent are now valued at €3.20 with targets being set at €5 or thereabouts. The Government wants us to believe that it makes sense for this State to fork out billions of euro to overpay for toxic assets. The Minister claims that all NAMA needs is a 10% bounce in property prices for it to break even. However, this only holds true if the toxic assets of the banks have been correctly valued and if we are at the lowest point of the property market. The Minister says the advice cannot be changed, but its interpretation certainly can.

If property prices seem to have bottomed out, as the Taoiseach seems to assume, where are all the buyers? Where are the cash-rich pension funds, swooping to pick up the bargains that lie around? They are nowhere to be seen. The Taoiseach bases his assumptions on a modest recovery, but he simply does not know what the future holds in that regard. A recent article in The Irish Times by Professor Morgan Kelly for whom I have great expect, clearly illustrates why buyers are holding on to their cash. As the professor was one of the few commentators to predict the current collapse in the property market, people would be very foolish to ignore his warnings. According to Professor Kelly, when the bubble burst on Irish agricultural land in the 1970s, real prices fell by a massive 75% and stayed at that level for 18 years. Based on that experience, and on what happened to the Japanese property market in the 1980s, Professor Kelly gives a clear warning that NAMA could generate multi-billion losses for the taxpayer. I respect his opinion.

The Minister seems to believe that because rents are still high in Ireland, property prices are set to increase. He should go out on the street and ask people. Can I suggest to the Minister that it could also mean that rents have further to fall? We know that Irish rents are still very expensive by European standards. We also know that more than 30% of commercial property in this city is empty, while interest rates and unemployment are set to increase. So which is more likely, a rise in property prices or a fall in rents?

The Minister told the House that NAMA would apply a 30% discount, on average, to the loans that it is purchasing from the banks. He did not tell us, however, what the discount is for each individual bank, which is fundamental. Can the Minister tell us the discounts being applied to Allied Irish Banks and Bank of Ireland? Do they have discounts lower than 30%? If so, what is the discount that is being applied? I ask the Minister to indicate to the House how much further recapitalisation will be required at Allied Irish Banks and Bank of Ireland, following his statement on NAMA yesterday. I hope that detailed responses will be given on both issues. What further money will the taxpayer need to fork out here?

Despite the many uncertainties and this being the biggest gamble of the century, the Government has still decided that the only way to solve the banking crisis is to place almost all of the risk on the shoulders of the people. They might not see it yet because these are paper transactions and it is being sucked away out of the system without it being visible to them. In contrast, the Minister intends to allow the investors and speculators who funded the property bubble to scuttle away from their responsibilities. This is why share prices have zoomed following the Minister's statement. All this comes from a party that continues to lecture the rest of us on patriotism.

The sad thing is that senior members of the Government believe what they are saying on NAMA. They are so cut off from the real world that they have ended up swallowing this fiction. When the Taoiseach looks in the mirror in the morning, he probably sees a man who thinks he is doing what is right. The rest of us see a Taoiseach whose policies helped destroy our economy in a Government which refuses to apologise and which keeps making the same mistakes. The Taoiseach said it is a gamble or do nothing. He had the privilege of sitting in the Department of Finance for four years when nothing was done, despite the fact that almost 1,000 people work in the regulator's office and the Central Bank. Advice was available to him not only from at home but also from abroad about the dangers that lay ahead and yet nothing was done. He now tells us that it is a gamble of €54 billion or do nothing.

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