Oh dear me. I do love coming to Ireland! Bless them. They must have one of the highest listenerships of talk radio in the known universe. It’s exceptional to come to a place with such an interest – albeit somewhat war-wearied – in politics and, now as of necessity, high finance (or is that low finance?).
At the moment, there’s an extra bonus, whenever you think the UK economy is in dire straits, you only need to glimpse over the Irish sea to prove that old adage:
There’s always someone worse off than yourself
Just take a few little excerpts from this Time article about NAMA (I heard that monicker being bandied around and then googled it):
…a crippling recession that has seen the economy shrink by 12.5% and unemployment soar to 13.4%.
Crikey! They don’t do things by half on the Emerald isle, do they? However, perhaps unlike the other PIIGS (The ailing quintet of Portugal, Italy, Ireland, Greece and Spain), Ireland’s crash boils down to property. Because of this, there is now a remarkable experiment called NAMA (National Asset Management Agency) – or “toxic bank” to you and me:
By the time the last transfer is made in February 2011, NAMA will hold €81 billion ($100 billion) of toxic debt, roughly equal to 50% of Ireland’s total economy. 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.”
Well put. But there’s more:
At the very least, Ireland’s toxic bank is a giant fiscal leap into the unknown. The crisis spreading through the euro zone — which has caused fluctuations in the rates charged on Irish sovereign debt, pushing it at one point last week to its highest levels since 2008 — has made it even more perilous and uncertain. If NAMA ultimately succeeds, it will be hailed as one of the boldest steps any country has taken in the face of the global banking crisis. If it fails, plumes of economic ash will blanket the country for decades to come, choking any hope of resurgence and recovery. And this time, nobody will be able to blame a volcano in Iceland.
One interesting feature of NAMA is that it is seen as a bail-out for Ireland’s property developers and there are thoughts that they ( the developers – as usually happens) have found a way of turning the situation to their advantage.
One suspects that there are little Joannas and Johnnies playing about in Irish kindergartens today who will grow up to become very wealthy “learned friends” on the back of the long enquiry into NAMA which could very well exercise future generations.