IrishWorker
18th September 2009, 01:06
Green Party threatens govt over Nama
http://newsfeed.tcm.ie/media/images/j/johngormleyseriousjan08.jpg
17/09/2009 - 18:40:44
The Green Party threatened to collapse the Government today unless it gets changes to the how the States controversial bad bank Nama will operate.
Environment Minister and party leader John Gormley warned concessions sought by his rank and file were fundamental to their continued participation in the Cabinet.
Separately, experts have clashed over whether Finance Minister Brian Lenihans prediction of a 10% rise in property prices central to the Nama plan working - is realistic.
Ronan Lyons, economist for the countrys largest property website Daft, said he wasnt convinced by Mr Lenihans claims that the housing market was now bottoming out.
No one knows for certain that we are not in the middle of a downward adjustment, he said.
Mr Lyons said the success of the 54bn Nama project was predicated on forecasts that property would bottom out at 47% below peak prices, before rising 10% by 2019.
While it seems reasonable, its actually quite a brave assumption, he said.
Its a brave decision to say that weve bottomed out now.
Mr Lyons said his own prediction was that the housing market would bottom out in Dublin first after another 10-12% drop in prices towards the middle of next year while the rest of the country will follow in a staggered manner.
But he was not confident the market could recover enough after that to see Namas needed 10% surge in the coming decade.
I would bet against it, he said.
David Duffy, of the economic think-tank Economic and Social Research Institute, also believes housing prices will continue to slide, however, he insisted they could bounce back in line with Nama predictions.
It doesnt seem unreasonable to recover by 10% over 10 years, he said.
That would be a fairly moderate recovery, even allowing for house price declines over a couple of years.
The ESRI, which advises the Government on policy decisions, predicts house prices will continue dropping next year, slowing to a more moderate decline in 2011.
Thereafter, on the back of our assumption of some international recovery, we have them growing, said Mr Duffy.
But those growth rates are very moderate and they would suggest that recovery of 10% is feasible. Its a reasonable assumption for Nama to operate on.
Meanwhile, Mr Gormley said his Green Party will pull out of Government if the rank and file reject Nama and the new programme for government at an upcoming convention.
The junior coalition partners are pressing for several changes to the legislation setting up the bad bank after a party preferendum revealed grassroots discontent for the present plans.
Warning that his party were a crucial member of the Government, Mr Gormley said if they vote against the revised proposals at their gathering next month, they will have no other option but to leave.
If the programme for government is rejected, if Nama is rejected, theres no question that we could not continue our participation in government, he told RTE radio.
In the Dil, Taoiseach Brian Cowen said a return to bubble prices was not needed for the proposed toxic assets agency to be a success.
Nama will pay out 54bn 7bn over the current market price.
I am absolutely certain that the proposed premium over market price is in the best interests of the Irish economy and, consequently, in the best interest of the Irish taxpayer, Mr Cowen said.
The Taoiseach denied opposition claims the Government was mortgaging the future of Irish children, branding it a misrepresentation of the facts.
Mr Cowen argued the public will not have to pay for the day-to-day running of the agency as 40% of the distressed loans generate money.
This will help cover interest payments on the Nama bonds and the schemes operating costs.
Mr Cowen also announced a new director of financial supervision would be appointed in the coming weeks under new regulatory reforms of the sector.
Read more: http://breakingnews.ie/ireland/green-party-threatens-govt-over-nama-426790.html#ixzz0RPbO1v86
http://newsfeed.tcm.ie/media/images/j/johngormleyseriousjan08.jpg
17/09/2009 - 18:40:44
The Green Party threatened to collapse the Government today unless it gets changes to the how the States controversial bad bank Nama will operate.
Environment Minister and party leader John Gormley warned concessions sought by his rank and file were fundamental to their continued participation in the Cabinet.
Separately, experts have clashed over whether Finance Minister Brian Lenihans prediction of a 10% rise in property prices central to the Nama plan working - is realistic.
Ronan Lyons, economist for the countrys largest property website Daft, said he wasnt convinced by Mr Lenihans claims that the housing market was now bottoming out.
No one knows for certain that we are not in the middle of a downward adjustment, he said.
Mr Lyons said the success of the 54bn Nama project was predicated on forecasts that property would bottom out at 47% below peak prices, before rising 10% by 2019.
While it seems reasonable, its actually quite a brave assumption, he said.
Its a brave decision to say that weve bottomed out now.
Mr Lyons said his own prediction was that the housing market would bottom out in Dublin first after another 10-12% drop in prices towards the middle of next year while the rest of the country will follow in a staggered manner.
But he was not confident the market could recover enough after that to see Namas needed 10% surge in the coming decade.
I would bet against it, he said.
David Duffy, of the economic think-tank Economic and Social Research Institute, also believes housing prices will continue to slide, however, he insisted they could bounce back in line with Nama predictions.
It doesnt seem unreasonable to recover by 10% over 10 years, he said.
That would be a fairly moderate recovery, even allowing for house price declines over a couple of years.
The ESRI, which advises the Government on policy decisions, predicts house prices will continue dropping next year, slowing to a more moderate decline in 2011.
Thereafter, on the back of our assumption of some international recovery, we have them growing, said Mr Duffy.
But those growth rates are very moderate and they would suggest that recovery of 10% is feasible. Its a reasonable assumption for Nama to operate on.
Meanwhile, Mr Gormley said his Green Party will pull out of Government if the rank and file reject Nama and the new programme for government at an upcoming convention.
The junior coalition partners are pressing for several changes to the legislation setting up the bad bank after a party preferendum revealed grassroots discontent for the present plans.
Warning that his party were a crucial member of the Government, Mr Gormley said if they vote against the revised proposals at their gathering next month, they will have no other option but to leave.
If the programme for government is rejected, if Nama is rejected, theres no question that we could not continue our participation in government, he told RTE radio.
In the Dil, Taoiseach Brian Cowen said a return to bubble prices was not needed for the proposed toxic assets agency to be a success.
Nama will pay out 54bn 7bn over the current market price.
I am absolutely certain that the proposed premium over market price is in the best interests of the Irish economy and, consequently, in the best interest of the Irish taxpayer, Mr Cowen said.
The Taoiseach denied opposition claims the Government was mortgaging the future of Irish children, branding it a misrepresentation of the facts.
Mr Cowen argued the public will not have to pay for the day-to-day running of the agency as 40% of the distressed loans generate money.
This will help cover interest payments on the Nama bonds and the schemes operating costs.
Mr Cowen also announced a new director of financial supervision would be appointed in the coming weeks under new regulatory reforms of the sector.
Read more: http://breakingnews.ie/ireland/green-party-threatens-govt-over-nama-426790.html#ixzz0RPbO1v86