Darragh O'Brien (Dublin North, Fianna Fail)

He can see the rest of my contribution on the monitor. I did not buy Eircom shares, either.

I welcome the opportunity to speak on this important legislation as regards the NAMA Bill. I want to take up a couple of points that were raised by Deputy Ó Snodaigh. This is not a question, and never has been, of a bailout for developers, builders or banks. This is about the real economy. NAMA is about getting the flow of credit back into the real economy. It has been lost on much of the commentary that every cent owed to a bank now remains owed under NAMA. NAMA is not purchasing the properties, but rather taking the loans. It is not a question of writing off loans or doing anything like that. As regards what happened to Zoe Developments in the courts this week, NAMA would have taken an exactly similar approach. Anyone with a non-performing loan such as that would be shut down, too. In that context it is important to note that the valuation that the Minister gave in his speech a couple of weeks ago was an estimate. Before a loan can be transferred to NAMA it will be individually valued and it is crucially important that people know that. If a piece of land is currently zoned residential, for instance, and there is no prospect of it ever being developed, it will be purchased at agricultural prices. It is as simple as that, so we are not overpaying for assets. We actually cannot overpay for the loans because this is against EU state aid rules. This process has been agreed with the European Commission as well, so it is not as if the Government has acted alone.

The Government has looked different types of options including nationalisation and various issues such as that. The very last thing we want to do is to immediately nationalise. Straightaway, we would probably have to pay compensation of approximately €4 billion to bank shareholders before anything could be done or any capital could be injected into the banks. Another point not dealt with properly by commentators, and who have not given it the credit it is due, is the fact that NAMA is not a bad bank. Both performing and non-performing loans will come into its portfolio and approximately 45% of the loans to be transferred to NAMA are fully performing. The others are stress loans. In that regard Deputy Ó Snodaigh referre to a 25% valuation. That type of thinking would automatically bring about a fire sale. That is what this is about. Nobody in the economy or on the street wants a fire sale of properties across the board. We have to be able to manage this process well.

It is not a question that anyone wants to do this, but rather a fact that it has to be done, for the good of the real economy, including the 1.8 billion or 1.9 million people working in it and the viable businesses that all Members of the House know cannot access credit. This is a continuing problem. The choices to be made were either to allow the banks five to ten years to trade through their problems, while every other business in the country was being strangled by having their overdrafts cut, being unable to access credit and not being able to trade properly. The knock-on effect of this is that invoices are paid later and the flow of cash slows down. We saw that in the report last week on average values. Only one in five invoices is being paid with a 30-day period and the reason is that viable businesses cannot access cash.

The importance of NAMA and what the Government is proposing cannot be overstated. I expect there will be amendments on Committee Stage and I hope the Opposition will engage in a responsible manner in this regard - with viable amendments. One aspect I should particularly like to see dealt with is lending to the business sector, especially the SMEs. Where possible this should be tied into the legislation on Committee Stage. Most people will see the problems businesses encounter on a daily basis. These need to be addressed. The longer businesses are functioning without proper access to credit, the more difficult will it be for recovery. It is clear from the figures that NAMA will pay for itself.

NAMA is not a massive gamble. It has been established in other states and will work well here. Events this time next year will show that. With regard to the idea of a recovery bank as proposed by Fine Gael in particular, one aspect that is forgotten in that process is the loans that are sitting on the books. There is no proposal to deal with them-----

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