Michael McGrath (Cork South Central, Fianna Fail)
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120. To ask the Minister for Finance the position on contact between the Government and the European Commission relating to the illegal state aid complaint made by the Commission by property developers in respect of NAMA; if his Department has provided all information requested by the Commission; when he expects an outcome to the complaint; and if he will make a statement on the matter. [33681/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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In late 2015, a complaint was submitted to the Competition Directorate of the European Commission (DG Comp) by a small number of property developers - including some former NAMA debtors - alleging that there may be state aid implications to NAMA's providing financing for the development of commercially viable residential projects by some of NAMA's debtors and receivers.

NAMA and my Department have co-operated fully with the European Commission throughout their preliminary investigations.  As the primary relationship with the Commission is held by the State, the Department of Finance is fully involved with NAMA in a joint engagement with DG Comp.  

My Department and NAMA have provided all information requested by DG Comp to date.  NAMA has produced detailed evidence regarding the complaint which the Department of Finance has provided to DG Comp to assist in its investigation.  My officials and officials from NAMA have had extensive engagements with the European Commission via written submissions, telephone calls and meetings, often in response to specific information requests from the DG Comp Case Team resulting from allegations made by the complainants.  My officials and their counterparts in NAMA have travelled to Brussels on two occasions to discuss the complaint in detail with the Case Team, most recently in March of this year.

I understand the DG Comp Case Team continue to consider all submissions and evidence provided and a preliminary finding has not yet been determined.  The Case Team may seek further information from my Department in the course of their deliberations and my Department and NAMA will of course provide whatever information and assistance is required by the Case Team. Senior Department officials maintain an open dialogue with DG Comp as they progress their work.

While it would not be appropriate for me to comment in detail on what is an ongoing DG Comp investigation, I would point out that NAMA lends money to willing NAMA debtors and receivers on commercial arms-length terms only where there is an expectation that such financing will enhance NAMA's recovery of the money owed to NAMA by its debtor.  

To be clear, NAMA is lending money to existing NAMA debtors to allow the debtor to enhance the value of the collateral securing that debtor's original loan owed to NAMA in order to not only pay back the additional lending with interest but, importantly, to pay back a greater proportion of the total debt owed to NAMA.

NAMA requires that the projected return resulting from the provision of additional funding must be the value maximising strategy for the asset and this is fully in accordance with Section 10 of the NAMA Act.  This means NAMA will facilitate the funding of development of only those sites that are commercially viable and where site development will deliver a better recovery than the sale of the undeveloped site.  

In addition, where NAMA provides funding to facilitate development by its debtors or receivers, it is provided at appropriate market rates of interest. The clear intention of NAMA's residential funding initiative is to enhance the returns to NAMA over and above any other viable strategy, provide funding on market terms and ensure there is no impact on competition more generally.