TIME magazine has a short piece on NAMA in the latest edition. The anti-NAMA quotes are from McWilliams (who has been stunning over the last few months – Morgan Kelly-esque – but might be overdoing on the media appearances as of late! The dude is everywhere…)
It will potentially become the country’s largest landowner, with a portfolio including many of Ireland’s hotels and a number of notable landmark buildings. The toxic bank option is one that several nations considered at the start of global financial crisis — and then dismissed as a bad idea. In Ireland, the risk that the experimental scheme could wreak even more havoc on the country’s frail economy has many worried. “NAMA will bankrupt Ireland,” says economist and commentator David McWilliams. “It is forcing us to borrow from tomorrow to pay for yesterday and, in the process, destroy the opportunities of today.”
Government view from department of finance press officer, Eoin Dorgan…
“The difference between Ireland and elsewhere is that what we had here was essentially an old-fashioned property bubble,” says Eoin Dorgan, communications officer at Ireland’s Department of Finance. “So, while debts in the U.K. and U.S. were based on complicated financial instruments that were very difficult to value, we could just base our valuation on the collateral, which was the land.” So, the government decided that if Ireland was to avoid the chaos that Greece and other teetering euro-zone economies face now, it needed to do something radical. “It made sense for us to do something direct and up-front by creating a ‘bad bank’ to bring certainty to the market,” says Dorgan.
Ah yes, certainty.