FF accused of acting like ‘Pavlov’s dog’ over NAMA

FIANNA Fáil has been accused of acting like Pavlov’s dog by continuing to insist NAMA is not a bailout for bankers or developers.

The accusation was made as the committee stage debate on the NAMA legislation got under way in the Dáil yesterday. This is the stage where the legislation is reviewed line by line and amendments are debated.

Labour finance spokeswoman Joan Burton criticised both Finance Minister Brian Lenihan and Fianna Fáil for continuing to claim NAMA is not a bailout.

“The minister’s party, like Pavlov’s dog, says: ‘This is not a bailout for the bankers and this is not a bailout for the developers.’ I do not agree. The minister is attempting, with minimum public information, to rescue the banks. He has said as much. He is also hoping NAMA will rescue many of the developers.”

The legislation was flawed and would not achieve its aim of restoring the banks to health, she warned. “Nothing about this bill will be successful.”

Fine Gael finance spokesman Richard Bruton said the crucial test of NAMA would be whether it restored the flow of credit to businesses and helped kick-start the economy.

But there was nothing in the legislation to provide for that, he said.

“It is notable that, despite assurances every day that this will happen, we have yet to see in the legislation any attempt by the minister to create a vehicle for assuring us that this will happen,” Mr Bruton said. “There is no indication of the type of lending that the minister envisages.”

Instead, banks would use the money they got under the NAMA scheme to improve their capital positions rather than lend, he warned.

“Banks will view this as a mechanism to maximise shareholder advantage. This will not increase credit flow into what is a high-risk economy, which is the fatal flaw.”

Mr Bruton said it was also a huge concern that NAMA would pay more than market value for the property loans it is taking from the banks.

“We are going out on a limb with this legislation and asking the taxpayer to shoulder a huge gamble,” he said.

Sinn Féin TD Arthur Morgan said the bill did nothing for low to middle-income families or those on social welfare.

“Those people believe they are being thrown overboard from the lifeboat to make room for the golden circle members, the speculators, bankers and their cronies,” he said.

Mr Lenihan rejected Mr Morgan’s claim, but chose not to respond to all of the numerous criticisms individually, saying he had a responsibility to focus on the proposed amendments rather than correct inaccurate charges.