Ireland will be condemned to a frozen economy if the State’s new ’bad bank’ isn’t set up, Brian Cowen warned today.
The Taoiseach insisted the planned National Assets Management Agency (Nama) was the only way to tackle the banking crisis head-on.
Ahead of tomorrow’s Dáil debate on the toxic assets agency, Mr Cowen said there is room for some changes in the proposals, being demanded by the Green Party and Fianna Fáil backbenchers.
But he was adamant Nama was the best way to fix the banks as quickly as possible so Ireland can join in a global economic recovery.
“If that were not to happen, you would be condemning Ireland to a period of stagnation or worse over a long period of time,” he said.
The Taoiseach dismissed suggestions that Nama was a gamble.
“The big gamble for this economy is doing nothing, allowing the rationing of credit to continue and viable but vulnerable businesses being put under serious risk,” he said.
“So the cost of doing nothing is simply too large to contemplate.”
Insisting it was not designed to bail out banks, but to get the country back to business, the Taoiseach vowed Nama would confront the economic crisis while protecting the taxpayer.
Banks and those who own the loans that will be bought over by Nama will have to take losses, he said.
Mr Cowen added: “We are only trying to make sure the taxpayer isn’t going to be the person at the end of the day that takes the loss.”
Fianna Fáil backbencher Sean Fleming demanded changes to present plans for how Nama will be run so it reduced Finance Minister Brian Lenihan’s power over the agency.
The Laois-Offaly TD wants Mr Lenihan to have no role in determining the value of loans that Nama will buy, as he would do in the case of an appeal, under the current proposals.
Fianna Fáil’s junior coalition partners the Green Party have already signalled their intent to demand a raft of changes to how Nama will operate, to address the concerns of their grassroots.
Both Mr Cowen and Mr Lenihan have said changes could be made to the legislation setting up the ’bad bank’ as it passes through the Oireachtas.
The Finance Minister will announce in the Dáil tomorrow how much Nama will pay to buy €90bn in toxic loans from the banks.