Enda Kenny (Mayo, Fine Gael)

-----with our national recovery bank. We would not set up a quango. If the Taoiseach says people who are opposed to NAMA are either unwilling or unable to understand what is going on, I refer him to the likes of Dermot Desmond or Professor Morgan Kelly or anybody else who has put forward an objective view on how this might be achieved.

Fine Gael is opposed to NAMA on principle because it is fundamentally unfair. Basic fairness would dictate that those who took the risks and were paid to do so should not now be bailed out by the taxpayer. If one was responsible for the boom in the banks, one must be accountable for their bust. It does not matter whether one is a shareholder, a bondholder or a developer. We are also opposed to NAMA because international experience shows it will not work for the taxpayer. The Government likes to quote the IMF when it suits its purposes. However, an IMF study in 2008 concluded that "government–owned asset management companies appear largely ineffective in resolving distressed assets, largely due to political and legal constraints". Proof positive of this comes from France in the 1990s, where a NAMA-type asset management company purchased €28 billion of distressed assets from Crédit Lyonnais, resulting in an €18 billion loss for the State. Is it any wonder the French have opted for a different model in 2008? Their model is similar to Fine Gael's proposed alternative to NAMA.

The proposal is based on two core principles: we need to get credit flowing quickly by establishing a national recovery bank; and we need to restructure the existing banks to place the risk with the shareholders and bondholders rather than with the people. It is unclear from yesterday's announcement whether the existing banks will be in a position to resume normal lending if NAMA is established. What is the position of Anglo Irish Bank, which is a property-based bank? If these assets are to be acquired at a discount, how is it expected to trade its way out of the difficulty in which it finds itself? I would like to hear an answer to that question. Given that it will be many months before the loans are acquired by NAMA, the likelihood is that the banks will continue to hoard their cash, whatever the Government says.

The national recovery bank proposed by Fine Gael is designed to inject cash rapidly and effectively into the economy. I bet the Minister that every single Deputy can give him umpteen examples of small businesses all over the country who are not getting overdrafts or credit and, as a consequence, are unable to continue in business. By this time next year, how many more thousands of people will be out of work because businesses will have closed down due to the lack of available credit?

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