ANALYSIS:If the Green Party Ministers cannot sell Nama to their membership, the Coalition will collapse, writes STEPHEN COLLINS
THE UNVEILING of the National Asset Management Agency Bill by the Green Party, a day before its official publication, and the claim that the party had a major say in the drafting of the measure showed just how desperate Fianna Fáil is to keep its Coalition partner on board.
The bottom line is that if the Green Party Ministers cannot sell Nama to their party members the Coalition will collapse. Fianna Fáil Ministers are quite prepared to swallow their pride to try to avert such a disaster in the current political climate.
The Fianna Fáil side of the Cabinet is also keenly aware that giving the measure a Green tinge may also help the Government to sell Nama to the wider public and that in turn will feed into the debate among the Green Party membership.
They will discuss Nama at their meeting in Athlone tomorrow and, more crucially, they will vote on it and a revised programme for government at a special convention in a month’s time. The survival of the Coalition will hinge on that convention.
The Nama Bill is not just any piece of legislation; it is one of the most significant Bills in the history of the State. The two Green Ministers have been involved in the process of formulating the project from the start. Although it may not have been obvious to Green Party members or the public, Eamon Ryan, in particular, has had a very direct role working with Brian Lenihan on the development of the Nama concept.
For that reason the scale of the negative public reaction to Nama, fuelled by the Opposition and a number of opinionated economics lecturers, came as a shock to the Green leadership. What really worried them was that a significant proportion of their party members appeared to have bought into the anti-Nama line so quickly.
That is why the Greens needed to ensure that their members understood the role their Ministers had played in coming up with the initial draft of the Bill during the summer and the final draft published yesterday.
Some of the Green concerns had already been met in the draft Bill, particularly the role for the Minister for the Environment in setting out some of the criteria which will apply to the analysis of the long-term value of particular loans. The analysis of zoning and planning permissions and the link to transport planning is something which the party has emphasised from the beginning.
The party also laid considerable stress on the concept of risk-sharing between Nama and the banks, following an article in The Irish Times on the subject by economist Patrick Honohan. His appointment as governor of the Central Bank indicated that Lenihan was also swayed by the Honohan argument.
A more recent Green emphasis was their insistence on a windfall tax on profits gained from increases in land value due to rezoning decisions. While that may be an academic argument in present circumstances, the commitment to introduce a windfall tax of 80 per cent on profits over and above agricultural value is a very important long-term measure designed to prevent another property bubble.
It will effectively see the implementation of a key recommendation of the Kenny report, which has been talked about for three decades but not acted upon because of constitutional difficulties.
The ban on the lobbying of Nama is designed to ensure that politicians and professional lobbyists are headed off at the pass before the agency gets going. It was another item on the Green agenda that might help to instil some degree of public confidence in the measure
Ryan did a good job selling both the Green input and Nama itself and that should be a help not only in getting the Green Party members on board but in helping to sway public opinion. In the clamour of voices seeking to influence opinion on Nama the most strident have managed to get the biggest hearing.
Lenihan has had to sell Nama virtually on his own. It is not that he lacks the support of his cabinet colleagues but that the
arguments are so complex and the opponents so varied that they have not been able to sell it in the face of constant sniping from the Opposition. It was not until former taoiseach Garret FitzGerald, and former Fine Gael leader Alan Dukes, expressed support for Nama as the least worst option available that some kind of balance began to come into the debate.
The direct involvement of the Green Ministers in attempting to sell the project to their members should help to clarify some of the key contentious issues as well as reassuring their own members.
However, only when Lenihan makes an announcement next week about the value of the bonds the Government intends to issue to pay for the banks’ impaired loans and the precise detail of the risk-sharing mechanism will it be possible to make a proper judgment about Nama.
The problem for the Coalition is that no matter what Lenihan says next week, Fine Gael and Labour seem determined to oppose the plan every inch of the way. That could rub off on the Green membership and influence their October convention, regardless of the input the party’s Ministers have made to the legislation.
Stephen Collins is Political Editor of The Irish Times