Saturday, 1 October 2011

NAMA is a “laboratory” for the EU

The Fianna Fáil-Green coalition considered that NAMA “might prove to be a laboratory” for other EU states faced with banks on the brink of collapse, according to the latest diplomatic communications published by Wikileaks.

Ireland’s permanent ambassador to the EU, Rory Montgomery, made the comment to the US ambassador to Ireland at a meeting in Brussels in September 2009, revealing that the EU “was watching closely” the establishment of NAMA.

In a meeting with American diplomats an executive of the Central Bank, Billy Clarke, said the guarantee had to be introduced because a “perfect storm” of external events related to the credit crisis had dried up traditional sources of financing for Irish banks. Another official, Gordon Barham, said that impaired assets were mostly confined to loans to commercial property developers. When pressed, Barham said the media had exaggerated the problem assets.

A comment from an American official at the end of the cable accused the Irish of “being a bit optimistic in their assessment of the level of impaired assets.”

No wonder, then, that the general secretary of the ICTU, David Begg, recently warned the Taoiseach, Enda Kenny, that the EU-ECB-IMF troika is using Ireland as a “social laboratory” for testing its economic policies. He pinpointed the fact that “all the talk of reform” ignored the actions of the banks that had sparked the crisis in the first place. “It occurs to a lot of people that reform is for the little people: it is not for the powerful.” He pointed out that the troika’s “economic laboratory” was using Ireland to test its economic policies—policies that were not “evidence-based.”

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