John Gerard Hanafin (Fianna Fail)

The slow-down in property prices that we predicted when the banks over-lent was exacerbated by the near collapse of the world economy and credit market a year and a half ago. Bear Stearns, Lehman Brothers, Fannie Mae, Freddie Mac and AIG all fell; therefore, it is no wonder that people are fearful because a year and a half ago we did not know whether we would have a banking system or whether we were heading into the second Great Depression. The confidence the Government has engendered by proposing the establishment of NAMA has steadied the nerves and helped the Irish banks. Our 25% share in the banks has significantly increased in value since we took it up. The news is not all negative because we are getting an 8% coupon on the money we lend to the banks and the value of our shares has increased significantly since we acquired these assets.

Taking the off-balance sheet lending is very prudent because this should be a self-financing vehicle. Over the course of 11 years we can reasonably expect it will at least break even. That is why an independent board has been set up. It is fully transparent to the Houses to ensure we get good, marketable value for the moneys we invest in NAMA. Some commentators in the marketplace are not doing us any service, in particular, those who suggest we leave the euro area. Having the euro saved us from the currency traders and sharks in the market. It is said sharks can sense blood in one millionth of a part of water. I can only imagine what these sharks thought at the suggestion the Irish pound be reintroduced. The currency would have collapsed because the traders would have traded against the Irish pound and left us in an impossible situation with a bankrupt country. The euro was the saving grace and the fact that the European Commission came to our aid with a plan to fund this to the tune of €54 billion at a figure of 1.5% will ensure the success of NAMA, as we are paying the lowest possible rate and allowing the money to be reinvested in our banking market. It is possible that there will be a shortfall, in which case the banks will be levied. They will have clean balance sheets for the next 11 years. They will be able to trade and grow and use the €54 billion to make a profit. There is no cogent reason to believe they would not have profits available if there was to be such an eventuality.

If the world economies pick up, it is possible there will be a small profit from this venture. I do not, however, have a crystal ball and cannot see the future. Those who claim knowledge of how the economy will go and the percentage of debts that will default are looking into crystal balls and do not know any more than the rest of us. We can use previous experience which tells us we have no choice but to invest. There is no better vehicle for getting the economy going again than the banks. It is possible that we will end up with more shares in them. If that happens, so be it because at the end of the 11 years the banks will be profitable, with all their bad debts taken off balance sheet. It is reasonable to expect we will have a larger share in them such that today's naysayers will not wish to speak about how they spoke about NAMA but rather take the credit for the benefits that will have accrued in the interim. It was interesting to hear earlier speakers refer to how the Government operates. I listened with particular interest as one Member opposite strongly suggested the Health Service Executive is an organisation that is strongly denigrated. There is no doubt that on one occasion the HSE was substantially ripped off when it agreed to pay for extra people on the medical card scheme. The newspapers at the time referred to it as a headage payment of €600 per person. When one goes into negotiations, one does so in good faith. The person the Government negotiated with at the time was Deputy James Reilly, the then head of the Medical Council. That has cost us millions of euro.