Dinny McGinley (Donegal South West, Fine Gael)

I welcome the opportunity to contribute to the debate on this Bill. This is probably one of the most important debates that will take place during the lifetime of this Dáil. In fact, it is probably one of the most important in the history of the State. In years to come people such as I, who are fortunate to be Members of the House, will probably be asked how we voted on NAMA. This debate will probably rank with the treaty debates or some of the great debates that were held at the beginning of the Second World War.

The enactment of this Bill will have economic and financial repercussions for future generations. What we are doing is transferring almost unlimited billions to the banks and financial institutions. What is being done constitutes a direct transfer of money from the current and future generations of Irish taxpayers to the institutions which have contributed so much to bringing us to the edge of financial ruin and national bankruptcy.

For centuries, our banks were looked upon as being institutions of probity, security, responsibility and conservatism. They looked after our savings - those of us who had any - in a prudent manner. They financed our home mortgages, supported domestic purchases and, in particular, supported business and enterprise - the engines of our economic development. The banks always acted in the interests of their shareholders and investors and were considered to be solid and reliable pillars of our economy and our nation and were a symbol international financial status.

It is generally agreed that banks are a necessity for a thriving economy. They provide the credit that is an absolute necessity for business and industry to operate successfully and to thrive. Today, however, Irish banks are unable to provide such support because some of them are already bankrupt, while others are on the verge of bankruptcy. We need not dwell at length on the reasons our financial institutions have arrived at this juncture. Suffice it to say that in recent years they were sucked into the property bubble and formed an alliance with developers in order to inflate an unsustainable boom. All of this was tolerated and at times orchestrated and encouraged by an indulgent Government which failed miserably to employ proper regulation and supervision.

That which I describe was at best an unholy alliance and at worst a conspiracy between the Government, the banks and the developers, who are responsible for transforming Ireland from a booming first world economy to the economic basket case of Europe and the developed world. For some years, we had a first world economy but, unfortunately, we also had a Third World Administration. On many occasions in recent years we were informed by responsible Members of this House and similar individuals outside it that we had the best economy and highest per capita incomes in the world, that Ireland was the richest country in the world, etc. However, it was all built on sand.

Over a period of years we were continually informed that property was the "only game in town". That phrase almost became a cliché. I become afraid when I hear something being referred to as the only game in town. Anyone who disagreed with the assertion to which I refer was accused of talking down the national interest and being out of step with the national consensus. That consensus was comprised of the developers, the banks, the Government and even the national media. During the period to which I refer, the property supplements of national newspapers were bigger and more widely read and studied than the news or sports sections of those same newspapers. Like the Government, the newspapers were also making huge profits on the building and property boom. It was, therefore, in their interests to keep the boom going and to talk it up.

The Taoiseach's immediate predecessor suggested that those who questioned the bubble should commit suicide. That was unbelievable. Nevertheless, a number of economists such as David McWilliams, Professor Morgan Kelly, our own recently recruited colleague, Deputy Lee, and even Alan Aherne - who addressed a Fine Gael conference in Galway three years ago - forecast that the bubble would burst. However, these individuals were dismissed as being at best eccentric or at worst irresponsible. It is now time to see who was right.

How could anyone justify the building of 90,000 dwellings per annum in a country of just over 4 million inhabitants when the UK - the population which is 12 to 15 times greater than that of Ireland - was building only 140,000 to 160,000? If the UK had been obliged to match Ireland on a per capita basis during the period in question, the authorities there would have needed to build over 1 million houses per annum.

During the period to which I refer, banks were allowing people to borrow ten to 12 times their annual income in order to purchase houses and apartments that were inferior and the prices of which were inflated. As a result, many young people who purchased in recent years find themselves in negative equity and are paying for houses that are currently valued at less than half the purchase price.

This is the financial millstone we have tied around the necks of thousands of young couples. That millstone was created by three guilty parties. Everyone recalls the national madness that saw hundreds of people sleeping for days and nights outside nearly or newly completed housing schemes in order to be the first to purchase. We also recall the unscrupulous practice of builders and sellers in increasing purchase prices overnight. How many times did we hear the word "gazumping" during that period? Gazumping was another despicable practice of the boom but no one refers to it now. It is those who encouraged the practice of gazumping that we are going to bail out. It is these people that NAMA is designed to cater for.

Members will recall the conspiracy whereby sellers, in cahoots with banks and other lending institutions, estimated the amount a person could borrow and settled the price accordingly. Such an amount bore no relation to cost or value for money and represented criminal exploitation in the first degree.

Then one comes to NAMA, which is designed to bail out the same institutions and developers that have plunged us to the verge of national bankruptcy. Members are being asked to accept a formula devised by those who largely created the mess and which could cost taxpayers up to €90 billion. One is told this is the only show in town and one then hears that in the main, builders and bankers are in favour. Their support alone is enough to send shudders through a society that has been brought to its knees by the greed of both sectors.

Once again, people are being told this is the only game in town. Where has one heard that cliché before? At the height of the property boom; it is true that history repeats itself. Anyone who questions NAMA is talking down the national interest or is out of step etc. and I have heard it all before. While the Government unfortunately does not appear to be learning from recent economic history, many independent economists and academics have done so. It is difficult to find an economist who is outside the Government loop and who supports NAMA. They see it for what it is, namely, a huge bailout for those who have brought us to this tragic situation. It is significant that all the commentators who are in favour represent the banks and financial institutions.

Irish banking is a big business and in recent years has been cursed by a culture of cronyism that has bordered on being financially incestuous. The same faces keep coming out of the woodwork repeatedly. It is a case of your joining my board, my joining your board, our joining his board and their joining our board, as the same faces come up continually. Their conduct usually is epitomised by sharp practices, shady deals, financial shortcuts, inside dealing and highly unorthodox financial shenanigans. Due to a lack of regulations and supervision, much of this is overlooked. Actions that would land one in jail in other jurisdictions, such as the United States, are tolerated and overlooked in this little country.

We now are in the process of handing over countless billions to these institutions. I understand that one of the most notorious of such institutions, Anglo Irish Bank, is being earmarked for €28 billion. This is a bank that probably never sanctioned a mortgage to a house purchaser in all its existence. How many of these billions will percolate to the ordinary borrower or business man or to the entrepreneur trying to create or even save a few jobs? The answer is nothing; not a single euro. Nevertheless, it is stated that this is the only game in town.

The principle on which NAMA is based is utterly crazy. We are being asked to buy property not at market value but at what it may be worth in five to ten years time.

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