NAMA SPV Plan Versus NAMA Draft Business Plan?

Last week NAMA published a draft business plan. It contained a detailed description of how NAMA was supposed to operate. It told us, for instance, that the loans of the largest 100 to 150 borrowers “will be managed directly by NAMA.” (page 28) and explained a timeline for how NAMA intended to recover funds from the loans it was acquiring.

NAMA’s draft business plan did not mention a Special Purpose Vehicle.

Yesterday, a document from the CSO was released, which informed us that

We are advised by the interim management of NAMA that, once established, it will create a Special Purpose Vehicle (“the Master SPV”), which will be responsible:

a) for the purchase, management and disposal of loan assets identified and valued by NAMA, and

b) for financing the asset purchases by issuing debt securities: these will consist of securities guaranteed by the Irish Government (95%) and subordinated debt securities (5%) – the latter may only be redeemed if the SPV makes a profit.

And that

The Master SPV will be a separate legal entity and will be jointly owned by private investors, who will own 51% of its equity, and by NAMA, which will hold the remaining 49%. The subscribed capital of the Master SPV will be €100m.

And that

The SPV and any subsidiaries will enter into primary service agreements with the financial institutions to service the portfolio of loans.

And that this SPV fits ESA guidelines as being a separate institutional unit—“is regarded as constituting an institutional unit if it has decisionmaking autonomy in respect of its principal function”

Now let’s recap. Last week, we were told that NAMA had a business plan that involved it directly managing the largest 100 to 150 borrowers and which set out its timeline for the management and disposal of assets.

This week, we are told that

  1. The purchase, management and disposal of these loans will be the responsibility of a Special Purpose Vehicle, which is a separate institutional unit from NAMA.
  2. This SPV will be, to quote Eurostat, “majority private owned”
  3. The SPV will have decision-making autonomy.

The independent decision-making autonomy is subject to the proviso that

The Master SPV will have its own Board, with members appointed by NAMA and the Private Sector equity investors. However, since the State is guaranteeing the securities issued by the Master SPV, the NAMA representatives on the Board will maintain a veto over all decisions of the Board that could affect the interests of NAMA or of the Irish Government.

That said, it is hard to view this veto as anything other than a high-level executive power that would only be used occasionally. It appears unlikely that the NAMA-appointed SPV board members would be intervening in the day-to-day management of the loans, so these would be left to the privately-owned SPV.

This raises a number of questions:

  1. What accounts for the inconsistencies between last week’s business plan and this week’s SPV announcement?
  2. Did the people who wrote the business plan know about the Master SPV?
  3. If so, why was it not mentioned prominently as a key element in the business plan? If you were starting a business and planned to raise some private capital to use an SPV to acquire assets, wouldn’t you be expected to mention this in a business plan that you present to potential lenders?
  4. One could also ask what connection there was, if any, between the figures in the NAMA draft business plan and the September 15th estimates of the long-term economic value of the underlying assets.

For a plan that involves spending €54 billion of our money, the continued dripfeed of incomplete and sometimes contradictory information is very worrying.

105 replies on “NAMA SPV Plan Versus NAMA Draft Business Plan?”


“Oct. 21 (Bloomberg) — Nouriel Roubini, the New York
University economist, said that the idea behind Ireland’s
planned National Asset Management Agency is “right.”
“You may want to pay more than current market values, but
you should not pay much more unless there is an argument that
what you are paying is truly the long-term value of these
assets,” he said in an e-mailed statement issued today by the
organizers of the International Financial Services Summit.
Roubini is due to speak at the conference on Nov. 5.”


Food for thought for those who believe LTEV to be the greatest act of criminally inherent moral hazard ever perpetuated on the face of this earth…

The Roubini Global Economics stuff occasionally mentioned the NAMA plan in a positive fashion but never in any detailed way that suggest they really understand the plan.

I suspect Roubini doesn’t give a toss about Ireland and worries more about pricing the exotic securities troubling banks elsewhere. It may be possible to argue that some of these assets are systematically underpriced right now. I don’t think that argument is so easy to sustain here.

@ Karl

well there’s two issues at play here.

1. i have read from a LOT of commentators on this site claim that paying LTEV is simply inherently wrong and we should only ever pay MV. Therefore the whole concept of NAMA was fundamentally flawed.

2. the LTEV’s were too high/MV’s were too low, and as such the overpayment was too much. But thats a seperate practical calculation issue rather than the more basic principle-based one above.

You can say “Roubini doesn’t give a toss about Ireland”, but then why was Stiglitz suddenly held up as a beacon of righteousness when he critisised NAMA? Roubini has given an opinion about NAMA, it shouldnt just be dismissed so casually.

What is described above in no way fits the common understanding of an SPV. An SPV should be wholly independent of the sponsoring company. They are obfuscating matters further by referring to this as an SPV. It’s not.

The CSO document states that “the equity investors will receive an annual dividend linked to the performance of the Master SPV”. This does not appear to be referenced int he business plan unless it forms part of the €240m annual management costs.

The business plan did say however that the banks would be paid for providing services to NAMA based on how much they recovered. Does this suggest the banks will be the private equity shareholders in the SPV. If so it may be the first effective bank incentivisation measure we have seen. On the other hand it is not clear that the entire of the NAMA surplus as per the business plan will accrue to the taxpayer. Again, there is an horrendous lack of clarity.

BTW, I have crunched some numbers from the CSO document and they don’t stack up for me. This may be due to “land” and “development” being homonyms with different meanings in respect of loans and property, in the CSO’s view. I posted a summary of my calculations on the Amendments to NAMA Bill thread in error yesterday. Do the figures make sense to anyone else?

So are there private sector investors investing in NAMA?

Wow!!!! thats the first Ive heard of this!

How will this work?
How much of the 54B are they putting up?
Are they getting the same T&C’s as the taxpayer or is there some deal?
Can I look at investing, Is there an offer for investment that I can look at and decide?

I’m not sure anyone here, or even Roubini (or Stglitz) has a crystal ball regarding asset prices 10years hence. But there’s an easy way to resolve this. A regulatory adjustment allowing the banks to value at LTEV is all that’s required, then the taxpayer won’t be on the hook and the banks can keep all the upside, which is only just and fair in a free market.

But I have a strong suspicion that if that proposal was in the offing, the equity value of the bank shares would be revealed for their true worth, ie zero.The reverse is certainly true, every time NAMA comes closer to reality bank shares rise. What is the stock market telling us, even though our politicians say the opposite? That the assets are close to worthless and getting them off the books is good news for shareholders.

If the soon-to-be NAMA assets are worth so much, let the banks keep them.


I disagree re your view that Irish property assets not being systematically underpriced.

As long as the Irish banks are highly dysfunctional, the Irish property market will be highly dysfunctional.

You don’t have a meaningful property market in the absence of financing for purchases so the current ‘market’ value is effectively a cash price- which is a complete distortion.

@ Eoin,

Do you have the full Roubini email? I’ve read some of his stuff. Can’t say I understand it all. But one thing I noticed is that he generally provides a lot of caveats.

So, caveat emptor, I won’t be buying a selective quote. Not accusing you of being deliberately selective but I would need to see context.

Also we now have a new concept to digest. Roubini would have us move from LTEV to TLTEV.

If he were aware that the State was to pay €64Bn and allow a roll-up of €5Bn interest in the first three years on security valued at €43Bn, I think he’d laugh his socks off.

A truly brilliant suggestion Mark…Saves so much work…. And as the entire business plan for NAMA depends on LTEV, it achieves the same result….

Throw in putting up the 4B for developers to finish off projects in NAMA as a debt for equity swap in the banks and the whole thing could be done in an afternoon…..

“Do the figures make sense to anyone else?”

The ‘other’ category is worrying. Particularly since it includes sub-5 mn loans from Anglo and INBS. Every tin-pot investment loan is going in.

On Roubini – there’s a bit difference between saying “NAMA looks okay as long as too much isn’t paid for the loans and a realist market value is used” and “NAMA looks okay”. That overpayment criticism is the same that has been levied by everyone else, so I don’t see that there’s anything new here. As a structure, we, the taxpayer, may have an issue with transparency and bailouts, but that doesn’t relate to whether NAMA has been set up okay.

It all comes back to price…

@ Eoin

Fair enough on Roubini — indeed, he deserves a hearing as much as Stiglitz, though like Greg, I’d like to read the comments in full. But, needless to say, I’ve no problem with disagreeing with Roubini about something which I figure myself to be better informed on.

@ Concubhar…given how unstable work is here atm even if the banks were 100% healthy do you think they would and should be giving mortgages to most people that want them?

@ Concubhar

“As long as the Irish banks are highly dysfunctional, the Irish property market will be highly dysfunctional.”

I don’t understand you focus on “Irish banks” vis a vis “Irish property”.

International capital is free to flow. Not everyone is broke.

If Irish property is under-priced international capital seeking abnormal return would snap it up. NAMA will stop this from happening.

NAMA guarantees precisely that which you seem to dislike. A dysfunctional property market (for a decade).

Correction to my previous post – the €240m does appear to be included the dividend:
“NAMA will incur administrative costs associated with the outsourced servicing of loans (fees paid to banks on a cost recovery basis and fees paid to a Master Servicer acting on behalf of NAMA). These are estimated to be of the order of, on average, €240 million per annum (details on page 12). While constituent components of this estimate and amounts incurred each year could turn out to be less, the overall estimate is considered to be the most reasonable assumption that can be made at this stage.”

The question of how exactly “fees paid to banks on a cost recovery basis and fees paid to a Master Servicer acting on behalf of NAMA” and who are the shareholders in the “Master Servicer” remain unclear. Do these “fees” include dividends? why are the fees paid to banks on a “cost recovery basis” but fees paid to the Master Servicer are not necessarily on a “cost recovery basis”? Are these the staff costs of the SPV as opposed to the dividend?

@ Mark,

Well said.

If the Minister believes in LTEV then let the banks value as such. Allow forbearance when looking at solvency.

@ zhou,

I think the Minister intends paying the banks a service fee for a “notional” staff level dedicated to NAMA work.

In short we get to pay the salaries of bank employees for cleaning up their own mess.


More likely that most of the staff costs of NAMA will be contained within the SPV and that these employees will want to know they are being paid for keeping an eye on the banks.

The Nugget Says:

“They are obfuscating matters further by referring to this as an SPV. It’s not.”

And “they” includes Eurostat and the ECB.

It is interesting that despite the variations in the amount NAMA is to recover over the first number of years there is no variation in the fees to be paid out. This may be prudence (i.e. budgetting for highest likely outgoings) or it may reflect that the banks will not be paid a straight percentage of the amount recovered.

Again, there is scandalous lack of clarity which prevents the public from analysing how costs will be calculated relative to costs recovered and how effective incentivisation will be at the various points in the life time of NAMA. I would have thought that the beginning would be more important but I heard Gavan Duffy (reality tv celeb business man) saying that years 6, 7 and 8 will be the difficult and crucial years.

Fudge begets fudge begets fudge. NAMA exists as a fudge to keep the guarantee going, LTEV is the fudge to keep NAMA going, on the asset side SPV the fudge to keep NAMA going on the liability side. LTEV wouldn’t be a concept in peoples heads if it wasnt “required” to get the govt NAMA fantasy balance sheet to balance. I wish people would get as angry about all this as they do about the new drink driving laws!

@ YM

well there’s a difference between “We’re overpaying” and “LTEV is inherently wrong”. Lots of people on this site are advocates of the latter, so i wouldnt say ‘everyone’ simply believes the level of overpayment is the issue. Roubini would seem to suggest that the basic principles of NAMA and LTEV are sound in his view.

@ Karl/Greg

think that is the full comments and context (trying to get the full email). He’s speaking here in Dublin in two weeks time (5/11) at the IFS Summit, so assume this is a warm up for that.

@ Eoin,

Thanks for that. Only €500 for the day.

But it includes a “free lunch”.

Right up NAMA’s street then.



I believe that lots of people are saying that LTEV is a made-up concept that has no basis in economics.

A bit more clarity on Mr. Roubini’s comments:

As I say, it’s all about price.

I think the price is too high. I think the risk-sharing doesn’t reflect this. I think the levy is already a busted flush. I think the risk of paying a LTEV based on assumptions about the current market is too risky for the state.

@ yoganmahew

“It is essential that the bad assets are taken off the balance sheets of the financial institutions and that the Government separates the good assets from the bad assets to clean up the financial system.”

Oops. Looks like Roubini is not in favour of NAMA after all.

“Government separates the good assets from the bad assets”

Emmm… Isn’t NMA deliberately taking good assets to provide an income stream for bad assets?

Still, maybe there all bad assets. No, they can’t be. That would be unpatriotic. Now where’s my green jersey?

@ yoganmahew

“…If it does that and if it also imposes haircuts on shareholders and unsecured creditors, it is doing something that is fair and efficient…”

Don’t see any haircut on shareholders or unsecured creditors in NAMA.

@ yoganmahew

“But if it does it in such a way that implies it is buying these assets at overpriced prices that does not reflect the underlying value, then it is giving a big subsidy to the bank shareholders and the unsecured creditors.”

Exit Roubini stage left.

Valuation of properties: This is relatively straight forward – wont give you accuracy, but you will be close. Discount out the bubble.

Start at 1994/5 and increment by +3% until 2006/7; gives estimate of a price doubling in approx 23 yrs, which should yield price rise of approx 25% in those 12 years. Establish actual posted values in 2006/7. Diff is the bubble. This has to be discounted. You may or may not wish to include the sag below the +3% trend line before prices MAY start to trend up again.

Difficulties: Values for different types of props will have to be calc. and reported separately eg. diff. types of urban, ex-urban and rural; commercial and land banks. Using mean or median value will be very misleading. In other words, the estimate of values will be tedious – but someone with the basic info and the time can do it – caveats and all.

LngTrmVlu: This is pure fantasy nonsense. The assumptions that need to be adduced are worthy of Humpty Dumpty!

The lack of general concern is most likely due to the esoteric nature of the NAMA concept – its mostly in the cognitive domain of Formal Operations. If you attempt to use normal mode of understanding, you get completely confused, and simply switch away to some other topic.

Please watch oil prices: if they stray over $80 we will be in deep dudu! Hope they won’t, but needs watching all the same.

B Peter

spot on. There is no problem with a little overpayment to achieve stated aims of keeping the banks listed. But the suspicion is that the govt is overpaying massively
*no disclosure on where the LTEV came from, is it the output of a sophistacated econometric model or done on the back of a fag packet.
*no disclosure on where the market value came from
*no public plan for recapping the banks so haow does credit flow again.
They could answer these questions by releasing more data but they will not-methinks for fairly obvious reasons.

@ George,

It could be the banks themselves. They could end up controlling 51% of the Master SPV.

Nobody really knows. Except those that know.

It’s a known unknown.

We know someone will own 51% we just don’t know who?

Most odd. No?

After the LTCM debacle in 1998 investment banks offloaded bad derivatives positions to Warren Buffet. There was literally no market for the positions in question, as all of the institutions that could handle this risk were the same way round. You could say the market value was zero.
The hold-to-maturity value of the positions was quantifiable, and Buffet paid more than zero but much less than LTEV. Investment banks had to dump this risk because their VaR numbers were horrible after the LTCM-derived volatility.

If there is quantifiable LTV then what Roubini says makes perfect sense. The assets are low risk on a buy-and-hold this basis.

In the case of Nama there is no quantifiable LTV on a large proportion of the assets. Nama overpays for highly risky assets with no quantifiable LTV.

I think we will find that overpaying for piles of stones in the midlands is not what Roubini has in mind.

Although information from the DoF has been meagre and high level, there are a number of inconsistencies appearing. For example, how does the LTEV relate to the numbers in the business plan.

There are 77bn loans.
According to the plan 15bn will default, with low recoveries of 25%. Perhaps LTEV are factored in to these 4bn recoveries, but they’re low one way or another.

There are 62bn of loans that are expected to repay in full. It also seems reasonable to expect these loans will pay the 12bn interest. Again, there’s no apparent dependence on LTEV.

But if we were to apply some of NAMA’s high level assumptions, it seems difficult to see how these borrowers will pay 74bn. These are my quick sums

*62bn avg LTV of 77%. Underlying property value of 80.5bn. (I’ve assumed the LTV of performing and not separated out the associated loans)
*47% market value decline. Current market value of 42.7bn.
*10% LTEV gain. Long term economic value of 47bn.

Being generous, I’ll ignore the 12bn interest. The borrowers still need to find 15bn. Perhaps there’s good reason to keep information at a minimum.

So in September Lenihan says we’ll break even with 10% LTEV gain. It seems that the business plan has no such dependency.


We are told that peak property values were €88bn based on loans (associated or otherwise) secured on property amounting to €68bn with an average LTV of 77%.

I believe Ahura has taken that into account?
(By calculating the underlying value of the 80% of loans that need to perform).

Apologies Ahura. I see where you are coming from now. You are deducting non performing loans from the €77bn total in calculating the MV of property security.

You have not factored in the €4bn to be recovered from non-performing loans. This is what they expect to recover (i.e., LTEV) for the €12bn default and so should be added to the €42.7 to give €46.7 which tallies with the €47bn figure given.

If we assume that the LTEV of defaulting loans is 77% then fet the following:
20% of €68bn = €13.6bn = defaulting portion of loan principal.
€13.6bn *(1/0.77) = €17.6bn = peak value of property associated with defaulting loans assuming 77% LTV.
€17.6 * 40% = €7.1bn = current MV of property associated with defaulting loans assuming a 60% drop from peak based on average decline in Irish L&D laond of 60%. It could actually be more if the defaulting loans are the amongst worst affected Irish L&D loans. However 60% seems reasonably generous to NAMA considering average drop is 43% (the greater the drop attributable to the defaulting loans, the less the loss to NAMA it implies).

€7.1bn less €4bn = €3.1bn = portion of current MV of lands which NAMA does not expect to be able to recover.

Therefore it could be argues that the MV of €47bn could realistically be reduced to €44bn.

Also, it is worth noting that the €4bn of recovery on the 20% default is predicated on a 15% rise in property values from current values. One assumes this would reduce to €3.8bn if there were only a 10% recovery. However, the rate of default might also be expected to increase meaning the lesser recovery rate would apply to more than 20% of loans!

@ Zhou,

From page 10 of the draft business plan: “It is also assumed that €4 billion will be realised from the sale of underlying assets secured by the defaulting loans of €15 billion.” (I think that covers of the defaulting loans)
So I read the 62bn in Table 5 as “Principal to be repaid by borrowers”. This amount is due from performing loans and independent of the 4bn recoveries. Assuming a 77% LTV, a 47% market value decline and a 10% LTEV gain, the underlying assets have a have of 47bn. This suggests (ignoring interest) that the borrowers will be 15bn shy.
In this simple calculation, I’ve tried to use DoF numbers. There was another thread last week where I queried the 20% default rate 🙂


Ok – I am even more with you now!

You are assuming that none of the non-defaulting loans includes rolled up interest. If rolled up interest is spread evenly between defaulting and non-defaulting loans (unlikely as roll up is typical of development in progress rather than lettings) then you are left with only €54.4bn in principal!

If the majority of defaulting loans are the worst of Irish Land and Development loans then their drop in value will be >60% meaning the drop for the rest will be <43%. The assumption of a 47% drop is substantially too high on non-defaulting loans in that scenario.

What we need is a break-down of the property types securing the loans expected to default and the relative LTVs of defaulting and non-defaulting loans.

Just another example of the information deficit.

SPV Just an accounting trick?
Could it be that this whole SPV trick is an effort to be able to keep the Nama money off the national debt figure?

I remember when the government claimed it was going to kepp Nama “off balance sheet” I wondered how they would do it.
Could it be that this is the solution they have come up with?


If you wanted to use 54.4bn and lower market value declines, it’s still hard to get to 62bn (and did I mention the interest). Assuming 77% ltv, 40% market value decline, 10% LTEV gain, you get underlying assets worth 46.6bn (15.4bn short). At 30% market value decline, the assets are worth 54.4bn (just 7.6bn short). Using DoF numbers available, performing borrowers will need to find a lot of money to repay.

It’s hard to see how Lenihan’s claim that a 10% LTEV gain over 10 years will get NAMA to breakeven based on the draft business plan.

Yes, greater information would be welcome, but I suspect they’re not in a position to provide it.

@ zhou & Ahura
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _

Notional value of loans being transferred = €77
Provision for losses = €7
Book Value of Loans transferred = €70

Consideration = €54

Write down for banks = €16

Is this correct?

Is this an immediate recap requirement if solvency is to be
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _

Read the following extract from the Eurostat preliminary response:

“the NPV of the SPV will be €4.8Bn under the condition that Irish property prices rise 10% in 10 years”.

OMG – two major errors here.

1) This 10% has been misunderstood by many, but by Eurostat??!! The 10% comes from 54Bn less 3Bn subbies equals +10% on 47Bn MV. The NPV in the Business Plan needs far, far, more growth than this (see other threads).

2) I do hope the NPV of the SPV is not identical with the NPV in the Business Plan which was described as having a conservative estimate of €4.8Bn. Jayz, 100M equity for a piece of that action, even Morgan Kelly would accept those odds!

But the CSO have stated that the SPV will get annual divies based on the performance of the book plus a 10% bonus if the SPV is ultimately profitable. This is estimated to be a 45% return over 7 years, which is a heck of a lot different from an NPV/equity ratio of 48/1.

We need more details on those annual performance divvies, please.


Agreed that an even distribution of rolled up interest makes it worse.

“This suggests (ignoring interest) that the borrowers will be 15bn shy.”
They will be €15bn shy of the €62bn which gives a healthy profit and pays back all subbies. €62bn non-default is better than a break even scenario.

From the Irish Independent (via Bloomberg)

Despite quoting Roubini,

“It is essential that the bad assets are taken off the balance sheets of the financial institutions and that the government separates the good assets from the bad assets,”

Dara Doyle fails to point out that NAMA is taking on both good and bad loans with the express purpose of using the income stream from the good loans to “support” the bad loans.

@ zhou & Ahura

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _

Notional value of loans being transferred = €77
Loans considered irrecoverable (bad loans) = €15

Value of Performing or Near Performing loans = €62
(Principal Repaid by Borrows)
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _

Current “Market” value of ALL Security = €47
Expected “Liquidation” value of Bad Loans Security = € 4

Current “Market” value of PERFORMING Security = €42
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _

Current “Market” value of PERFORMING Security = €42
10% Uplift per business plan = € 4

LTEV of Performing Security (per BP) = €46
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _

Cost of Acquisition = €54
Management costs = € 3

Total cost = €57
Less Principal Repaid by Borrows = €62

“Profit” per Business Plan = € 5
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _


How is this Principal to be repaid?

LTEV of Performing Security (per BP) = €46
Less Interest Payable = €12

Available for Principal Repayment = €34
Developer Profit Required = €28

Principal Repaid by Borrowers = €62


Principal Repaid by Borrowers = €62
Plus Interest Repaid over the course = €12
Total Repaid = €74
LTEV of Performing Security (per BP) = €46

Developer Profit Required = €28
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _

Maybe there’s some double counting here?

Feel free to tear asunder.

I think the €2.7 Subs (if not honoured) could be taken off the €28

@ Eamonn Moran

Yes, this is of course a “smoke and mirrors” jobbie to massage the stats. Nobody is really denying that, and clever stuff from the CSO if it works, one never ceases to be amazed how grown international investors are influenced by appearances rather than substance.

But I do hope these SPV equity holders have not been presented a gimme. The CSO says they stand to gain 45% if the NAMA business plan is on course, that seems fair, wouldn’t take those odds myself.

But Eurostat thinks the equity holders will get the full 4.8Bn of the NPV (with private investors getting 51%). Now that would be a gimme.


the way I see it…

You assume the €7bn relates exclusively to NAMA loans. That is incorrect.

You are also trying to apply the same write-down twice. The NAMA process performs the write-down which portion of the €7bn performs.

The write down for banks as a whole (which isn’t as important as write down for AIB and BoI) will be €77bn-€51.3bn = €25.7bn.

This will not replace all of the €7bn but only a portion thereof.

The amount of write down and the amount of recap required are not equivalent.

Nobody has yet explained how the goverment’s prediction of total repayments of €74bn(€64bn capital & €12bn interest) is consistent with a 10% increase in property values.

Even if we assume no defaults it doesn’t stack up.

How are the developers going to repay €74bn from assets that are currently only worth €47bn?

@ zhou,


So the €77 is the “current” book value of the loans being transferred.

Table 4 is a bit of a red herring as it includes provisions on all loans as at 30th June 2009, and therefore cannot be compared to the €77 of loans being transferred.

Seems odd that the table was included. It can only be misleading.

So, excluding the subs @ €2.7 the “Covered Group” will face a shortfall of €25.7 as you say.

If you were generous and allowed that €5.7 of the €7 relates to the €77 that would leave a shortfall of €20. Correct?

To maintain the status quo solvency wise that would mean the “Covered Group” would need to raise €20.No?

And whatever the shortfall for Anglo the State has to pick it up. No?

@ Dreaded_Estate

Can you have a look at my sums above.

That’s what I’m trying to get to.

I think the undeclared assumption is that the “Developers” need to make a profit before interest of €28Bn.

Could be wrong.

Fundamentally, what is lacking is any kind of explanation of the relationship between the MV of the loans and the LTEV of the loans. This is at variance with IMF advice and may jar with the ECB opinion.

It has the further effect that we cannot decide on limits or maximum parameters for adjustment factors in the valuation methodology because we do not understand how the calculations will work. The legislation does set maximums on aggregate LTEV of portfolios and individual loans but we are not been giving any explanation which allows us to say confidently that the maxumums are set at the right level. Also, the maximums can be varied by statutory instrument. I believe that the detail released by the DoF to date shows contempt for the democratic process. If Anglo is a gun to our heads then let us do Anglo first on a separate basis.

As a Nama dissident I am getting more and more worried. It looks more and more like a straightforward giant bailout for Anglo, Nationwide & AIB, and amazingly it keeps getting worse. I appeal to Brian Lenihan to please stop Chinese Water Torturing Nama dissidents with a non-stop drip of revelations of new Nama catastrophic failures. I would appeal to his 81 economist supporters to persuade him to stop finding new ways of making Nama worse. It is already bad enough.

@ Zhou,
The 15bn is more an assessment of the likelihood of performing loans repaying, rather than a direct loss from performing loans. Using DoF numbers, it appears that even with a LTEV gain, these borrowers face a massive hit. This makes the DoF default rate of 20% extremely ambitious.

“They will be €15bn shy of the €62bn which gives a healthy profit and pays back all subbies. €62bn non-default is better than a break even scenario.”
If you want to use the 15bn as a loss, wouldn’t it be easier to say this would result in c.7bn losses to the taxpayer. 😉

Can someone explain what this SPV is? How will it work? Does it mean that private investors can take a share in NAMA, take on the risk and get a return if NAMA makes a profit?

@Greg Says:
October 21st, 2009 at 4:30 pm

I don’t see the 16bn interest payments to nama bondholders. I might have missed it, but I thought it would be part of your total costs.

@ zhou,

“If Anglo is a gun to our heads then let us do Anglo first on a separate basis.”

Maybe that should be

“Let us do Anglo IN first” 😀


“Let us pray” 😯

@ Ahura

Thanks for taking a look.

“I don’t see the 16bn interest payments to nama bondholders. I might have missed it, but I thought it would be part of your total costs.”

No it’s not there.

I’m not looking at the profitability or otherwise of NAMA.

I’m trying to determine the performance of “Developers” in order to meet their side of the NAMA business plan.

I’m happy to be wrong but I think they have to make €28Bn (before interest €12Bn) in order to “have” €62Bn available to “Repay Principal and cover the €3Bn NAMA operating costs”.

If they can make €28 then NAMA makes a profit of €5.

If they make €10 NAMA makes a loss of €13.

As an aside, the €4 security disposal proceeds on the liquidated loans matches the €4 negative interest ( €12 – €16 ) in the NAMA cash flow projection.

I’m now convinced that the goverment has blurred the distinction between two separate projections.

1. 10% increase in property prices from the estimated €47bn gives a new market value of €51bn. Enough to repay the €54bn less the €3bn in subs. NAMA breaks even.
This assumed that NAMA would “wash its face” and is consistent with developers only repaying amounts equal to the value of the property.

2. The business plan seems to have a completely separate set of assumptions.
There is simply no way developer can repay €74bn from assets the goverment thinks will only be worth €51bn.

Plugging the 10% increase into the business plan results in a €10bn loss or NPV of €7bn.

Personally I belive the €47bn is a gross overestimation of the value of the property and in reality the property is likely to be worth 20% less than this.
That give total NAMA losses of €24bn and an NPV of €17bn.

Plus whatever we have already pumped into the banks and what we will have to pump into Anglo and the others in the future.

@ Dreaded_Estate

Did you look at my sums? I don’t mind being wrong. Feel free to criticise.

On your numbers. I think you have to take €4Bn off the €47Bn. This is the liquidation value of the security of the bad loans. It is matched by the shortfall in interest ( €12 – €16 ).

So the €62 has to come from €43.

A 10% increase gives you (rounded) €47.

Interest of €12 must be added to the €62 (that is, the €12 cannot come from thin air).

So total repayment = €74, as you say. We have €47. Difference €27Bn

That €27Bn must come from “income” not “increase in market value” as that has already been taken into account.

So where are the developers going to get €27 of income.

I don’t think we differ to much.

Yeah, I think we are thinking along the same lines.

The developers are only going to be able to repay loans based on the value of the property they sell plus any income they receive on those properties.

I cannot see how they can repay €74bn from €44bn of assets.

@ Dreaded_Estate


I’ve called it the “undeclared assumption” of the NAMA business plan.

I can’t see how the developers can deliver this.

It makes an entire nonsense of NAMA.

@ zhou

“I believe that the detail released by the DoF to date shows contempt for the democratic process.”

Think about this.

That business plan could have been published before the Green Party meeting.

It could have been independently scrutinised.

It wasn’t.

Does that make you fell better?


I have seen a number of costings etc but there is one variable / factor which doesnt seem to be priced in. One of the main arguments being put forward by NAMA is that it will leave behind strong and importantly independent financial institutions who can lend on a commercial basis into the economy. If this is right how do you price the benefit, especially when compared to alternatives of nationalising etc.

Is it reasonable to suggest that NAMA will leave us with a financial system that will facilitate economic recovery to a better extent than (a) doing nothing and (b) the suggested alternatives. In number terms – GDP grows by 15% over the period 2010 to 2015 after NAMA instead of for example 10% – in an overly simplistic calculation this could be worth billions. So NAMA at the end makes a loss of €5 billion but this is more than compensated for by its role in economic growth over that time? is this reasonable and should we not price it in? if not why not?

Getting back to the SPV, what is its purpose? I am honestly lost at this stage in the debate, but to my uninformed, October-sleep-laden brain, I can come up with two plausible explanations:

1) It is an accountancy trick, to keep Nama bonds off balance sheet so we can run a zillion percent debt to GDP ratio right up until the IMF puts us out of our misery. This is sinister enough, if you consider the intention of SGP criteria was to provide clear, transparent criteria to ensure the fiscal integrity of participating MS. It makes muck of the euro zone rules.

2) To provide a cloak of opacity to the Nama decision-making process, in order that dirty deals may be done with tenters “under conditions of commercial confidentiality” (i.e. without the pesky Oireachtas scrutiny of those who are footing the bill). This is not a new trick – the Irish government has been using PPPs for this purpose for years, including the criminally under-costed Metro North project, portions of the LUAS and CIE’s risible Interconnector supertunnel through Stephen’s Green.

Nama supporters no doubt have other explanations, but reading over the entries on this thread so far, I have yet to hear them. Instead we got some selective quotations from an Roubini who admitted he didn’t really know anything about Nama or Ireland.

Eoin? Zhou?


“I believe that the detail released by the DoF to date shows contempt for the democratic process.”

I suspect many people who harbour misgivings, of varying degrees of gravity, about this entire exercise – and indeed the entire formulation of Government economic policy – have come to this conclusion.

The clear-sighted critiques advanced by the principal contributors on this blog may, indeed, have compelled the Minister and the DoF, grudgingly, to reveal more detail, but I fear that they have not led to any significant deviation in, or modification of, the overall thrust. It is possible that the more insightful the critiques the more they have encouraged a “bunker mentality” in response and attempts at subtle (and not so subtle) marginalisation of those advancing these critiques. This does not mean that these critiques have no value. They most certainly have right up the signing of this bill into law by the President.

But this leaves those of us who are determinedly opposed to NAMA and who can only register support for these critiques examining the extra-parliamentary, but rigorously constitutional, means that may be deployed to avert this folly.

@ Graham

its no 1 basically. But i think you’re being harsh on it being an “Irish” problem. Everyone is at this, and everyone always has been. We keep lots of our obligations off balance sheet (public sector pension liabilities of €105bn anyone?). The German and French ‘bad bank’ solutions are off balance sheet. The SPV means we get to remain at least semi-compliant with the SGP for another year or so, and it means we won’t pop up on those comparison presentations as right down towards the bottom of the debt:gdp league within the Eurozone/OECD. In terms of the Eurozone rules, Greece has been lying about its deficit levels for years, and lots of EU countries breached the annual deficit levels per SGP in even the good years without any major punative actions being brought against them.

I know everyone thinks investor decisions come down to pure cold hearted facts in term of Irish debt and at what levels we are funding ourselves, but sometimes there’s an underlying theme or story that is also helping to drive the general perception – is Ireland past the worst and entering consolidation and recovery mode, or is it about to take another huge lunge lower in terms of its banks and its property market?

This is why, i think, most of the supporters of NAMA are still behind the process, albeit with some serious misgivings about the risk sharing element and the lack of clarity on many many of the details and assumptions. The NAMA process, if presented correctly, shows an Ireland that is stabilising its banking sector and supporting its property market, at the same time as passing the Lisbon Treaty and effecting budgetary adjustments that no developed country has ever enacted outside of an IMF enforced agreement. It shows we’re serious in terms of scale and substance in trying to restore stability (key for bond buyers) and allow a recovery (key for investment). These provide the basis for renewed confidence and positive expectations (key for consumer). The SPV is part of this overall process as it means we don’t see an explosion in our debt:gdp ratio and we get to remain within the SGP thresholds. Ultimately we all know that whether there’s an SPV or an on-balance sheet liability, the net outcome will ultimately be the same in terms of who picks up the tab. But at least via the SPV it won’t generate the negative statistics and perceptions that an on-balance sheet liability would.

@ Graham

as an example (from the US):

“When the government calculates its debt and deficit it does so on a cash basis. This means that deficit accounting does not take into account the cost of future promises until the money goes out the door. According to, if the federal government counted the cost of its future promises, the 2008 deficit was over $5 trillion and total obligations are over $60 trillion. And that was before the crisis.”

Thats vs an official deficit of 700bn or so in 2008 right? And an official debt:gdp ratio of 70% for the US (as opposed to a obligations:gdp ratio of 425%).


okay, thanks, that was a useful explanation – though not one I would agree with. Clearly the relative scale of FR or DE off-balance sheet fudges pales in comparison and the last time Greece was a model of good public policy Athena was flying around Olympus in the form of an owl.

So the lack of transparency this nominal private sector involvement has the potential to create does not worry you at all? I mean, let’s just imagine this SPV is controlled by the banks themselves. Then we have:

1) Banks control Nama via the SPV

2) Gov’t is represented in this cozy backroom office, but cannot provide transparent accountability due to commercial confidentiality considerations.

3) Billions of euros disappear into hole

4) A by now noticably greying Fintan O’Toole writes a scathing IT article condemning the findings of the McDowell Tribunal (ca. 2015)

@ Graham

it would appear that the Ecostat is not considered just ‘cosmetic’ by some in the markets. It’s worth the efforts by the govt for this reason alone if true.

As a coincidental aside, Greece actually just got downgraded by Fitch.

As for the banks controlling NAMA i really don’t see that being the situation. I think the set up was purely a legal issue, and the actual appointed board will be working for the benefit of NAMA and the State as a whole, with the ‘private’ investors purely incentivised by the performance mgt fee/dividend. As much as anyone might question BL’s motives or competency etc, i really dont think he has set up NAMA to actually be controlled by the banks themselves.

Nama comes out with a shoddy business plan based on fanciful assumptions. You say, don’t worry! It’s the same as a small start-up company preparing the best possible projections for the bank manager!
No, it’s not the same. There is €54 Billion of our money of a difference.

Then, Nama tells the CSO it’s creating an SPV. Nothing about this in the business plan of a week before and, from nowhere, that the SPV Nama is acting through is majority privately owned. You say, don’t worry! This is really cunning, all governments do this! No, it’s not the same. Nama is the equivalent of the US adding €4,000 Billion, €4 Trillion, to it’s national debt.
This is huge. Just because governments have never counted future pension liabilites does not excuse this. It is like leaving the debts from the Iraq war ($3 Trillion) off the government balance sheet.

Gordon Browne took stakes in the UK banks in return for recapitalising them. Britain cleaned their banks and moved on. We have, after many months more delay, created a Nama monster to avoid taking large stakes in our banks. Even Brian Lenihan is conceding it won’t recapitalise them and the process of setting up Nama looks like being a long drawn out nightmare. Nama is a giant mistake. Our leaders should stop trying to book us onto this banking Titanic, and instead, by nationalising and recapitalising the banks, fly us safely with maximum speed and maximum effectiveness to our destination of cleaned up banks.

Eoin, I fear that you will still be supporting Nama well after we have hit the iceberg and even after most of us have frozen to death in the North Atlantic.

@ Eamonn

“Britain cleaned their banks and moved on”

This is a joke right? They’ve had to rely on almost 15% of GDP being injected into the economy via QE and they’ve debased their currency by around 40% against the Euro. The net wealth of the UK in foreign currency terms has fallen by around 25% in the last two years.

They’ve done this because they’re running the biggest budget deficit in the developed world (bigger than ours!), and because the only way their investments in the banks won’t go sour is by creating another asset bubble to get them out of the current one. The US is essentially doing something similar.

Trust me, if we had the option of QE, we’d be doing the same thing.

Whose banking system is better off now, Britain’s or ours? The Americans took stakes in their banks too. Nama is a wacky idea and its getting wackier.
How wacky would it have to get before you would accept us taking majority stakes in the banks?

@ Eamonn

no problem with us taking majority ownership in the banks, and have never claimed such. Have been dead set against outright overnight nationalisation of AIB and BOI, as this would be more or less de facto nationalisation of the banking system.

Nationalised financial system = failed financial system = failed state

Thats the equation im trying to avoid.

It’s also debatable what the long term impact of QE is. It certainly isn’t cost free.

The baking system has already failed IMO.

Very little can be gained by pretending it hasn’t.

@ Bond. Eoin Bond

“debased their currency by around 40% against the Euro”

40% ! Was this all due to the banking crisis?

Not looking good for Irish exports to Britain then.

@ DE

the baking system? Ah give Brennan’s a break man…. 🙂

More seriously, i simply think there’s a difference between a technical insolvency and an actual one. Given the recent ung’teed bond issuances by AIB and BOI, its arguable that everyone else sees the irish banking system as completly broken or failed. I’d put it in a ‘severly distressed’ category. I suppose the problem is that there’s very few examples of entire national banking systems going bust or being nationalised. The only one i know of is the small island in the North Atlantic that i am not allowed refer to. I think given our truly enourmous short-to-medium term funding requirements, simply nationalising without considering the dangers of a capital/funding freeze is just as much of a gamble as NAMA itself.

I also think this is where the NAMA debate has blinded us to what the real long term problem is – the budget deficit. If we weren’t running an enourmous medium term deficit, then i think we’d be in a much more flexible position vis-a-vis negotiating with bond holders and maintaining our funding requirements.

@ Greg

well Sterling started to tumble a month or so after the Northern Rock debacle, and its gotten steadily worse as the QE has been rolled out. If they decide to increase the QE beyond £175bn, then it’s only likely to get worse for the Pound. You cant rule out a run at parity (though unlikely) this side of Christmas, which is only going to make the shopping season even worse here.

A lot of the customers of my bank are exporters to the UK, and they’re bleeding at the moment. Anecdotally, 90p seems to be the highest threshold most of them can take, though some of them have started to re-focus their sales into the EU successfully.

@ Bond. Eoin Bond

Surely Browne & Darling are happy to let the Pound devaluae in order to make British goods and services cheaper.

There are limits of course but I don’t see tham using every available opportunity to talk about a strong Pound.

Eoin’s objections to full nationalisation have considerable validity. But if the same energy wasted by our authorities on Nama was instead devoted to refining a nationalisation scheme I am sure we could allay many of the fears e.g. having the state shareholdings controlled by an independent trust or even keeping half of the voting shares in private hands. Offering shares in the cleansed entity to bondholders would also serve to dilute our stake. And we could leave the shareholders with some shares too.

As a Nama critic I am happy to say what I would like to see changed:
1 Pay no more than market value.
2 The market value should be the real market value, not peak less 47%.
3 If this results in large majority state ownership for AIB so be it. It has bankrupted itself twice, misbehaved between bankruptcies and is still as brazen as ever. I would show more mercy to BOI, but make it clear they wouldn’t get another chance. I would take a 50% stake in them but I would be happy to let it drop to well below that as soon as possible. Also, there is the small matter of the historic building they own on College Green, which I would have expected they would already have agreed to hand over in gratitude for keeping them afloat. Bankers eh.
Finally, like almost everyone in the country, I have no interest in permanent state ownership of the banks. As soon as market conditions make selling advantageous we should start reducing our holdings.

Now that I have outlined how I would like to improve Nama, I would ask you as a Nama supporter to outline how you would recapitalise our banks through increased state ownership.

I believe you are willing to offer the subordinates 30 cents in the euro.
You are also against outright nationalisation of AIB and BOI. Fair enough.
And haircutting Senior Bondholders will, you believe, make us all blond fishermen and cover the land in geysers and volcanoes. Ok. I assume you are happy enough with Nationwide being nationalised.
But, subject to the approval of M, how far would you nationalise AIB and BOI? There are no trick questions, if you only want us to take a 10% stake in return for fully recapitalising them so be it, you are entitled to your opinion. I probably won’t agree but neither I nor I hope anyone else will abuse you for it.

@ Eamonn 76

“Also, there is the small matter of the historic building they own on College Green, which I would have expected they would already have agreed to hand over in gratitude for keeping them afloat. Bankers eh.”

You may be too late there Eamonn. Looks like they’re already selling the bricks & mortar. 😯

There’ll be nothing letf by the time they have to nationalised.

I was thinking of Bank of Ireland’s palace on College Green. But they could move their branch into AIB’s building across the road if we got that too. If necessary I’d make AIB buy it back. No excuse then for BOI not giving us our former parliament in gratitude for saving them.

@ Eamonn76

Yeah, I know the building you were referring to.

But how about this.

Any bank taking NAMA funds has to hans the deeds to all its bricks & mortar to the State until every cent is paid back.

After five years they have to pay rent @ 7% (the Ministers yield) on the LTEV of the property.

After ten years the State owns the property.

That’ll put manners on them.


At Greg, I am now sure that you knew the building I was referring to. Apologies for my Lenihan moment.

So far the banks have acted like they have bailed us out, especially AIB.
Commentators talk about public servants sense of entitlement. The French aristocracy did not have AIB’s sense of entitlement. If they keep on insisting on appointing an internal chief executive I will personally wheel down a guillotine to Ballsbridge when the Board next meet. I will use cardboard cut outs the first time, but they better not make me drag it down again for the meeting after that. This crisis has had remarkably little impact on AIB’s view of itself and view of how others see it.
As was said of the Bourbons when they returned to rule France after the revolution:
“They have learned nothing and they have forgotten nothing”.

@ Eamonn76

I’m long torches & pitchforks. 😆

I’m beginning to wonder if it is just arrogance on the part of the bank “leadership”.

It’s a very select club. You don’t ask to join you are invited to.

Have they not been in denial about the state of their balance sheets for the last three or four years?

I think it is possible to view their attitude as similar to that of a cult.

A cult will always deny outside opinion, which most know as truth.

How can they accept it? The cult dies, even if it is just a cult of greed.

Back on topic though,

Had a conversation with zhou, Dreaded_Estate, Ahura on the “undeclared assumption” of the NAMA plan.

Conclusion. Even if you accept the plan as is, 10% washes NAMA’s face etc., there is the fact that the developers haven’t a hope in hell of meeting their side of the bargain. They need to turn €46bn into €74bn.

As a fellow NAMA addict I’m sure you’ve seen it. (In 2020 there’ll be a fully fledged NAMA anonymous, twelve step program and all).

What say you? Can the developers turn a pig’s ear into a silk purse, even if the pig is wearing the latest lipstick?

If I didn’t live here the prospect of Nama would provide a fascinating struggle between members of the elite and large interest groups to minimise their losses and maximise their income.
So far the banking executives have won. With the exception of the very top ones, usually the very top one, they are all identical. Eventually, by whatever means, the insolvent companies they work for will be made solvent. Its shocking some of them aren’t more grateful.
The bondholders too look to have done amazingly well. Even the deposit taking property companies bondholders are safe.
The shareholders look to be doing much better than those of any other insolvent company.
The regulators and departmental officials – just the top men went.
Minister for Finance during bubble – now leads country.
With the banks fixed in a way that pushes the costs far into the future politicians and civil servants have a breathing space – very like the one developers are getting.

That leaves the developers and the building industry generally.
The €5 Billion borrowings are for the larger builders, with the promise of more borrowing by Nama and credit from the banks.
The smaller builders whose loans are not going into Nama will presumably benefit as sub-contractors.
Smaller developers will be facing much less desperate banks so they gain, and through land prices being propped up.
So we are left with the big developers. For a time the tough talking of the minister had me fooled. I thought that because of their key role in the economy and their establishment status that the bankers would be bailed out and the builders would be demolished. It was puzzling. Then along came the business plan. No repayment of principal until 2013? That is simply a large gift. And Nama will take its time in making them sell off sites. It is fairly clear now that Nama is a large-developer ICU.

Will the large developers turn €46 Bn into €76 Bn? Their alchemy works in the opposite direction. The taxpayer will lose money through Nama. Even Eoin says €10 BN. Mathews says probably €20 BN and excludes interest. Morgan Kelly is going €35 Bn before interest. We have just lived through a massive property frenzy. The country has multiple crises. There will be no return to boom price levels and no return to 58% of peak. Nothing like the Celtic Tiger is likely to reoccur. We are certain to loss huge monies on these loans and we all know this in our hearts.
It was always a question of who would pay for the huge loan losses?
And in the end it is going to be the taxpayer. The losses faced by members of the interest groups are just vastly greater than what individual taxpayers will face. There was a battle, and civil society fighting for the taxpayers lost. The interest groups wanted it more.

The only way taxpayers may gain is in the propping up of property prices, if they own property. That could well have been a significant reason, or at least justification for Nama. That is not a permanent gain but it is a gain. But even that will impede competitiveness and impose costs on non-property owners.

So I would say that even many of the developers would privately tell you Nama’s projections are untenable. And I doubt if any of them believe them. For myself, I will keep on opposing Nama until it is probably passed and once it operates I will criticise it to try to minimise its overvaluations.
Sadly, this may well have no effect on the final Nama score which looks like:

Interest Groups 20 Billion (plus interest)
Taxpayers NIL

On another issue:
Was Minister Lenihan fulminating about the academic economists again yesterday? For him they are like hippies were to Richard Nixon.

@ Eamonn 76,

Can’t say I disagree with much of what you say.

Most of the NAMA opposition would probably also agree.

NAMA is just “pretend & extend”. However the truth will out. I think you’re right, and most of the culprits will be living in tax havens by then.

NAMA is too difficult for the average citizen to understand.

@ Eamonn 76,

“Was Minister Lenihan fulminating…”

If he was I didn’t hear him. But with what’s coming down the road he and his class are going to need some whipping boys.

I have a felling in my bones that Lenihan already knows the EU/IMF are saddled up and ready to ride.


If Nama has proved anything it is that Lenihan is a hard man to stop. By fair political means or foul he achieves his objectives. His big error on Nama was letting the process be so drawn out that resistance had time to gather. So he may make sure the major loan transfers are done fairly quickly. I think he will get his €4 Billion in cuts. The deficit does seem to be widening but there is no sign of a new depression. So the government will have got Lisbon through, where he did a lot of very effective negative campaigning, Nama was all him and he is the lead man on the budget which he looks like getting through too. It is beginning to look as if he is like Putin in Russia, who runs things even though he is not president but a supposedly less powerful prime minister. No wonder Lenihan has all those journalists hypnotised, he’s the most ruthless politician we have ever had.
He will do all in his power to keep the EU/IMF out and I would bet on him succeeding.

@ Eamonn76

I did hear Lenihan say something along the line that “If nothing was done next year the deficit would be €15bn”. Could be wrong.

But if this is the case it seems to me that the €4bn cuts will see us just treading water.

Not a good prognosis.

Personally I think the gap in public finances is so great external intervention is a significant probability.

NAMA and the constitution!

Article 6 Section 1

“All powers of government, legislative, executive and judicial, derive, under God from the people whose right it is to designate the rulers of the State and, in final appeal, to decide all questions of national policy, according to the requirements of the common good.”

“To decide all questions of national policy, according to the requirements of the common good” And how on in Gods name is NAMA by any stretch of the imagination for the common good?

Article 33 section 1

There shall be a Comptroller and Auditor general to control on behalf of the State all disbursements and to audit all accounts of moneys administered by or under the authority of the Oireachtas

“To control on behalf of the State all disbursements” and how exactly does he intend to fulfill his statutory function in this regard? is he going to control NAMA disbursements as he must and can he sign off on figures which are blatantly wrong or at best mere guesstimates which expose the tax payer to billions of Euro in losses.

Article 45 Section 2 subsection iv

“That in what pertains to the control of credit the constant and predominant aim shall be the welfare of the people as a whole”

Not the welfare of bankers, bond holders or developers who have embraced NAMA with religious zeal for obvious reasons.

Article 45 Section 4
“The State pledges itself to safeguard with special care the economic interests of the weaker sections of the community”

This surely is good news for ordinary mortgage holders who, presumably even before the banks are sorted, must according to our constitution be safeguarded “with special care”

Finally, Article 28 states

“The Taoiseach shall keep the president generally informed on matters of domestic and international policy”

And has he bothered to keep her informed? When was the last time he discussed NAMA or SPV’s with her?

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