An all-Ireland economic summit must be held to find an alternative to the controversial plans to establish a ‘bad bank’ to handle toxic debt south of the border, Sinn Fein said today.
The existing North-South Ministerial Council should be used as a forum to enable governments on either side of the border to examine the National Assets Management Agency (Nama) plan, the party’s Jennifer McCann told the Stormont Assembly.
The republicans are fiercely opposed to the Irish administration’s proposal to create the agency - which will buy up 77bn Euro worth of borrowings from five banks in the biggest financial rescue package in the history of the state.
Almost 5bn Euro of the bad debt is for property and land in the North.
Ms McCann, who is chair of Stormont’s Finance committee, said there would be a potentially catastrophic impact on the northern housing market if Nama decided to release those assets in a quick fire sale.
“Currently there is no agreement on when the finances that will be spent acquiring these loans will be recouped,” she said after tabling a motion before the Assembly calling for the summit.
“If this land were to come onto the local market in the next few years there would be significant deflation of current values, leaving many more people in negative equity and having a long term detrimental effect on overall economic recovery plans.
“What we need to see is an all-island economic summit to deal with Nama and its effects island-wide.
“Furthermore it should not be the situation that the two economies, north or south, are acting in isolation. We need to find common practices and close co-operation in future economic planning on an all-Ireland basis.”
Finance minister Sammy Wilson said the decision on whether to proceed with Nama was a matter for the Dublin government.
The DUP East Antrim representative said the only input the Belfast administration should have is how the agency’s actions would impact north of the border.
He also said he was confident Dublin had no intention of crashing the North’s property market. It would not make economic sense in an already depressed market, he added.
The minister said he did not feel that the remit of North South Ministerial Council should be extended to look at the issue.
The Sinn Fein motion met with significant opposition within the chamber and was defeated at vote.
PRICES FALL FURTHER
Meanwhile, the latest house price index have exposed fresh holes in the Nama proposal.
Average house prices in the 26 Counties decreased by 1.5% in August compared to reductions of 1.1% in July and 1.5% in June, according to the latest figures.
Fine Gael’s environment spokesman, Phil Hogan, said figures revealed the property market was still falling and had not yet hit rock bottom.
“The fears that the Fianna Fail Government got it all wrong on Nama are already being realised,” said Mr Hogan.
“Despite a large number of property specialists and economists estimating that the property market had further to fall, Brian Cowen and his Government accepted the banks ‘good faith’ on the issue of prices.
“They said that the market had bottomed.
“Simply put, the calculations underpinning Nama are wrong. Its calculations relating to market value are clearly at variance to what is happening in the market.”
Mr Hogan warned that Nama’s credibility was in shreds.
“Property prices are nose-diving, interest rates are about to increase and rents are plummeting,” he added.
“It is a vehicle to price development lands at 70% of their value in order to bail out bankers and developers at the expense of the taxpayer.”