Brian Lenihan Jnr (Dublin West, Fianna Fail)

The EUROSTAT position on the balance sheet treatment of NAMA and the SPV took account of the balance between State and private engagement in the proposed organisation structure. The proposed amendment could result in EUROSTAT changing its preliminary decision on the treatment of NAMA operations in the national accounts. The amendment also runs the risk of making the SPV so unattractive to any investor that no suitable investor can be found.

I have repeatedly explained that we should welcome the EUROSTAT preliminary decision, as a result of which the acquisition of the assets from the institutions by NAMA will have no effect on our general Government debt ratio or our general Government balance. This puts the Irish asset protection scheme on an equivalent footing with bank support schemes in other member states that are also being recorded off balance sheet. The main advantage of this is that it minimises the danger of the markets and international investors misinterpreting our headline debt or budget balance ratios when comparing us against other EU member states. However, I have also repeatedly stated that the statistical treatment does not change the basic fact that the operations of NAMA will lead to an increase in the amount of the State's potential liabilities. Neither should it be overlooked that these liabilities will be met by a countervailing asset holding.

It is intended that the master SPV will be established by the NAMA board to conduct the purchase, management and disposal of loan assets identified and valued by NAMA. The legislation provides a robust process for the appointment of board members, requiring that they have senior level experience and expertise in relevant areas. I have indicated that I would consult the Opposition leaders on the appointments to the board in the interests of creating all-party confidence in the board. I have already received a letter in that respect today from the leader of the Labour Party.

It is an executive matter for the expert board to allow NAMA to carry out its business in the most efficient and effective manner. We must be careful that in creating a board to carry out a complex commercial task, for which the members will be accountable, we do not then undermine their ability to carry out their duties and functions by the imposition of statutory regulations and restrictive rules which prevent them acting in a commercial manner.

A detailed legal shareholder agreement is being drawn up, and that will be put in place to ensure that at all times, the NAMA board has a veto over any master SPV actions or decisions. This will protect the NAMA board itself, which has significant responsibilities, and it will also be in the interest of Irish citizens. I intend to issue a direction to the board of NAMA that not a single decision should be made or allowed to be pursued by the master SPV which will not be in the best interests of achieving the objectives and purposes of the NAMA legislation. Following the Dáil debate, a number of amendments were made to reflect the role of the master SPV in the NAMA group entities. I outlined those amendments on Committee Stage, so I will not re-iterate them now.