Paschal Donohoe (Fine Gael)

-----to allocate the responsibility for creating NAMA to the former Taoiseach.

The IMF report has quite a bit to say about the implications of that agency. The phrase used is as follows: "If well managed, the distressed assets acquired by NAMA could, over time, produce recovery value to compensate for the initial fiscal outlay". The report adds that when the Irish authorities were pressed for the total amount of financial loss they believed the Irish banking sector would produce, they could not give the IMF that figure. That means either that the figure is not available or that the authorities chose not to furnish it to the IMF. I think the former explanation is more likely.

The best analysis of the likely balance sheet for NAMA has been produced by Constantin Gurdgiev and Brian Lucey of Trinity College. They make the point that the assets need to be purchased by NAMA at a discount of between 27% and 50% in order to produce a zero loss for the taxpayer, given the likelihood of bad loans. That puts into stark contrast the size of the problem created by Fianna Fáil's pumping up of the property sector during that period in office. That is the extent of the memorial that will stand as a record of that Government's period, and it is a millstone that will hang around the necks of generations to come. Let us bear in mind that when NAMA is established it will be the largest agency of its kind anywhere. Therefore, the value of the bad loans NAMA will have to manage will be greater than that of any other such agency in Denmark or elsewhere. That figure says everything about the scale of mismanagement of our economy.

The IMF report has some interesting things to say about public expenditure control. It examines the deficit figure the Government says it will produce by 2013 and ponders what is likely to happen, based on what the Government has done so far and how the economy performs. It says it simply here: "The staff's baseline implies stronger expenditure consolidation than that currently projected by the authorities to reach their goals." This means that the planned cuts and tax increases will have to be even larger than the Government is currently claiming, in order for the Government to reach its own goal. The report goes into some detail about how that will be. It states that primary expenditures will have to be brought down by 9.5% of GDP, which is far ahead of anything the Government is claiming at the moment.

We are told to believe that if the Government manages to implement its plan, our economy will spring forth like a newborn infant, with the high level of debts removed from its neck and with an ability to grow like any other economy. Again, this report has very pertinent and worrying things to say about that. It states that public debt will stabilise at relatively high levels. It analyses the size of the structural deficit that our country will still have if and when the global economy recovers. Structural deficit deals with the kind of public debt levels that will exist if our economy begins to grow again. It states that following the April 2009 supplementary budget, the structural deficit will still remain at about 11% of GDP. Even after all these measures have been implemented, our debt as a percentage of our national income will be far above 10%.

When we sit back and ask what exactly is it that this Government has achieved, we can point to the global economy and other mitigating factors. However, it is a plain, simple fact that things in our country are far worse than they should be, and that our economy is in a worse state than it should be. If we compare our economy with equivalents such as the Spanish economy, we can see that they are able to pump additional money into their economy due to prudent and smart moves they made. The cutbacks they have had to make have not been as harsh as those we unfortunately need to make. They are in a position which should see their economies return to growth quicker.

I make all these points and speak about the need for a plaque to be outside the National Asset Management Agency, stating that it was founded by Bertie Ahern TD. If he decides that he will not do it, I will do it on his behalf.