Ivor Callely (Fianna Fail)

I welcome the opportunity to participate in the statements on NAMA. I declare that any financial interests of mine are shown in my annual declaration of interests statement.

Since the last quarter of 2007 the Government has been telling us how serious the financial situation is. I have great admiration, respect and appreciation for my colleagues, the Minister for Finance, Deputy Brian Lenihan, and the Minister of State at the Department of Finance, Deputy Martin Mansergh, for the manner in which they have gone about their business on this issue. They have been constructive and consultative and have shared with all Members of the Upper and Lower Houses all matters relating to our very serious and challenging financial position, including matters relating to NAMA. The Minister of Finance was prudent to be open, transparent and consultative on the importance of our economic recovery process. The engagement of the Minister on this matter has been essential to ensure full understanding of the issue and of his proposals in light of the critical difficulties posed in the current climate.

The greater the level of understanding in identifying the extent and nature of our problems, which have been seriously compounded by international financial factors, the greater the prospect of success in the resolution of our problems. We must be serious in our purpose, have firmness of resolve and have belief in our ability to overcome these difficulties. A number of international factors conspired to create the perfect storm and place us in this the biggest of financial whirlwinds. The last speaker blamed the Government for the changing financial position as if we were a protected island not affected by anything happening in the international sphere. The Minister of State and the officials in the Department of Finance may like that to be the case but there is a global recession and financial problems in virtually every country in the world. It has hit some harder than others and it has not yet reached some countries, while others are showing signs of recovery.

Work is well under way on the Government's framework for economic renewal. The economic renewal plan sets out a number of priorities and actions the Government is taking in the short and medium term. In the preparation of this plan in the last quarter of 2008 a vast amount of critical assessment, research and effort was put in by a host of experts to ensure we took the correct course of action. The Government set out objectives in the plan, identified the supports and resources needed and worked out how best those supports and resources could be activated to ensure we achieved the optimum benefit. All are agreed that one of the key factors for our economic recovery is a healthy banking system with a clear objective to facilitate a flow of credit and cash into the economy. If I have one criticism it is that the NAMA business plan should have been before the House in the first quarter of this year. We have all known since 2007 the seriousness of the challenge. Work commenced on a resolution in 2008, yet we are still discussing the matter in the final quarter of 2009. It is sad and not good enough. I have already expressed my views to my colleagues, including the Minister for Finance and the Taoiseach. I appreciate there was a need for open debate to the extent that has been done. On balance, however, there is a cost implication in the protracted debate and the impact on business is massive. At last we are now at the stage of a draft business plan for NAMA prepared by the interim agency team to try to get a handle on the prevailing position. It sets key parameters, sets out its stall for an initial work programme, and commences asset valuation and transfer processes. In addition it carries out what one would expect from a process of due diligence. NAMA's mandate is simple: to obtain the best achievable financial returns. It will have all the necessary commercial powers. As we know, NAMA's powers and functions include the acquisition of certain bank assets to cleanse our bank balance sheets of possible toxic loans.

These financial institutions should then be able to use their improved position to obtain cash from the ECB or other international lenders. It is expected that this will result in our financial institutions being in a position to mobilise the flow of cash and credit into our economy. I have heard some speakers mention their concern as to whether banking instructions will do this, should they be in a position to mobilise their own access to cash. This is a critical marker for the success of NAMA.

I have taken the opportunity to speak to some senior banking personnel, both at AIB and Bank of Ireland. They have explained their difficulties in obtaining cash. In addition, they have indicated what they are doing in the current restricted climate and what they would like to be able to do should they be in a better position. I do not see why I should mistrust them. That is their business and it is what they wish to recommence. I have no doubt the Minister of State, Deputy Mansergh, and his departmental colleagues have discussed this issue with the banks in question. I would like to think that given the scale of the Government's commitment to assist our financial institutions, there has been some level of acknowledgement and understanding to ensure our economic recovery. That, of course, is in the wider public interest.

The draft plan strikes me as a good attempt, with limited and sensitive information, to address our problems. The figures include a loan book value of €77 billion at a cost of €54 billion, with a breakdown of 70% to 30% Irish to overseas portfolio, in addition to an estimated recovery over the ten-year period of the business plan and a possible €5 billion net gain. There are many questions concerning those type of figures. Why pay €54 billion? Why was it not less? Where is the €77 billion? How was the €5 billion figure calculated? We could tease this out until the cows come home. I have no doubt that within the portfolio there are some good and valuable assets, while there may be some difficult projects that will need a certain amount of effort, perhaps a fresh pair of eyes and a determination to make a success of the project. I believe that, by and large, it will happen.

The old mantra "location, location, location" will come into play concerning the NAMA portfolio. How NAMA will address the portfolio will only be fully realised when a detailed assessment of exposure is calculated as well as what the market might present. The management of the 70% of the loan book that comprises the Irish portfolio will impact on the economy and will require careful consideration. The 30% overseas portfolio might be managed differently and may attract a choice of options, especially if clean and easily disposable, thus attracting money in quickly without any great management headaches.

I offer Mr. Brendan McDonagh, the interim managing director of NAMA, and his team, every good wish with their challenging task. The nature of the present crisis is different from anything we have ever experienced in this country. It permeates across every parish and region and consequently is felt everywhere. Members of the public who have never had any great knowledge of or interest in national financial matters and who up to now have not normally wished to be informed of them are anxious. They want to see their legislators taking decisive action to resolve the issue. I understand there was, to an extent, a need for a protracted debate on what we are doing. We saw what happened in the markets yesterday and overnight, so it is now appropriate for the Minister to proceed, albeit without haste.