NAMA: “Pushing ahead and sticking with a plan that is wrong for Ireland”

“Pushing ahead and sticking with a plan that is wrong for Ireland”


No to NAMA
Richard Bruton

You can’t trust a word Fianna Fail say about the banks. We have learned that costly lesson again and again and again over the last eighteen months. It’s not just the truly shocking figures announced this week to bail out Anglo Irish Bank.
If we look back at what has been said in the past by the Government we can get a good handle on whether we should believe anything else they say now. When the Guarantee issued in September 2008, Minister Lenihan said it was “the cheapest bank bail-out in the world so far” – instead it has proved to be the most expensive. When the €11 billion of taxpayers’ money was given to AIB (€3.5 billion), Bank of Ireland (€3.5 billion) and Anglo Irish Bank (€4 billion) in May-June of last year, Minister Lenihan again promised new lending for small businesses and generous cash return for taxpayers. Neither was delivered.
More recently, when enacting the NAMA plan for the State to borrow €54 billion to buy toxic assets from the banks, Minister Lenihan said on September 16 that this would see “a wall of cash” hit the Irish economy.
But instead lending conditions have continued to tighten and the banks have said they will use this money to repay their own debts instead of lending it into the economy. Bottom line, the banks aren’t lending and small businesses and their workers are suffering.
The most recent figures released by the Central Bank on Wednesday of last week bear this fact out. You and I know it is the case but the grim statistics tell the story even more clearly. The Central Bank told us that total lending in the economy fell by €1.3bn during February, bringing the annual rate of decline to 7.3 per cent.
They also said that lending for home mortgages fell by €156m in the month, which means the amount being re-paid on existing mortgages was more than the amount given out in new mortgages. Crucially, the figures also show that the pace of decline in lending to businesses has been accelerating, falling at an annual rate of 3.7 per cent in February after a 3 per cent drop in January. So there we have it. In clear unambiguous terms from the Central Bank. Small businesses and home owners are being starved of credit because the Government’s banking policy is not working.
It just isn’t. The real tragedy facing us now is that rather than accept that they got it wrong they are going to push ahead and stick with a plan that is wrong for Ireland. Through stubbornness or ignorance they refuse to realise their mistaken approach and persist in pouring good money after bad. And still no admission of guilt or acceptance of responsibility from Fianna FΡil for the mess they helped create.
And through all of this, depressingly, we haven’t heard one word about job protection or creation. Bailing out Anglo seems to be a priority for Fianna Fail; bailing out the 440,000 people unemployed in our country is much less urgent. That is where Fianna FΡil has got their policies and priorities completely wrong.

Richard Bruton is the Fine Gael spokesperson on Finance.