Fine Gael said the European Commission’s decision to approve National Asset Management Agency (Nama) would not alter the fact that “not a single element of the Government’s banking strategy is working”.
Finance spokesman Richard Bruton said banks were still continuing "to tighten their credit squeeze” on vulnerable employers.
“And even when Nama starts purchasing toxic developer loans with taxpayers’ money at inflated prices, both the IMF and the banks themselves have confirmed this is unlikely to have any material impact on credit conditions facing struggling businesses,” he said.
He was speaking after the European Commission ruled the Nama plan was consistent with European Union guidelines on bank bail-outs.
Labour’s Joan Burton said the ruling hardly came as a surprise as it was the only proposal put on the table by the Government.
But she warned Nama was only one element of the Government’s recovery plan for the sector.
Approval is now awaited for the bank restructuring plans submitted to the Commission by AIB, Bank of Ireland and Anglo, the three biggest Nama participants, she said.
“Given the Commission’s track record in dealing with other European banks, the conditions attached to any approval could be quite onerous and could have a significant impact on the future structure of the Irish banking sector,” Ms Burton said.