Joan Burton (Dublin West, Labour)

The Labour Party will support the Fine Gael amendment. We have an amendment No. 17 relating to the special purpose vehicle which we consider to be very important because it cuts to its fundamental status. This very peculiar SPV was informed to the Dáil very late in the day. I do not believe it was the subject of any message from the Government to the Green Party that it would have such a fundamental role and would, in fact, control the issuing of the debt and control the loans to be taken over. This is the terminology the Minister used in describing the SPV in the note he sent to the Dáil. Despite that, and despite NAMA taking the risk, nonetheless, this SPV would have to pony up only €100 million, with €51 million to be provided by the private sector, for control of an entity which is going to control the issuance of €54 billion of Government debt. To people involved in high finance, that is a very small amount of money.

The Minister referred to the example of France as a model for the SPV. As I pointed out to him in an earlier discussion, the banks in France were the beneficiaries of the particular French arrangements that gave rise to their SPV. The French provided a group of investors with the funds to invest in the French SPV and, therefore, they were the representatives of the banks in the same way, say, that the Anglo ten - the ten investors who took on the shares in Anglo Irish Bank from the Quinn family - were specially related to Anglo and were significant customers of the bank. In other words, it was a golden circle arrangement. 6 o'clock

These financial gymnastics - the use of off-balance sheet vehicles - were thoroughly discredited in the accountancy world as a result of the collapse of Enron and WorldCom. We can say that something is off-balance sheet, and it sounds as though we are at some distance from whatever the off-balance sheet does. In fact, the directors of Enron and WorldCom ended up being fully responsible in law for the liabilities created for the SPV. In the same way, the Irish taxpayer remains fully responsible for the liabilities created by the SPV and by NAMA. When discussing the crisis in banking besetting many European countries with his fellow finance Ministers, the honest thing to do would be to classify the special government measures from different EU states that obtain EU approval and which are recognised as arising as a consequence of the financial and banking crisis.

See this speech in context