Shame on RTE yesterday for headlining with an extract from a radio interview with Minister for Social Protection Joan Burton, an interview in which Minister Burton said she regretted her party and former Cabinet colleague, Roisin Shortall’s decision to resign. Yes, the Minister Reilly controversy is in the news but if the embattled health minister decides to have a boiled egg and soldiers for breakfast this morning, that hardly warrants a headline. And what was Minister Burton supposed to have said? She was delighted Minister Shortall resigned? Worse still for RTE, during the same interview on the Marian Finucane radio show on Sunday 30th September, Minister Burton let slip that NAMA faces a loss of upto €15bn. The Minister said at 1 hr 22 mins onwards in the following – click play yesterday’s show – that in relation to the bank debt shouldered by the nation
“… Not counting, by the way, another €30 billion that we’ve committed on NAMA, at least half of which we will get back”
Having a senior minister around the Cabinet table let slip such an admission surely ranks as more important news than stating the bleeding obvious, that she regrets the resignation of her party colleague. But this is RTE, a broadcaster which today would appear (again) to be ignoring the departure to bondholders of €1bn from this shores – and evidence in the public domain suggests bondholders are in the main foreign investors – at AIB, a bank into which we have poured €21bn so far and which, without taxpayers’ money, would be utterly bust. Mind you, this is the same RTE which failed to report the €50m loss in its pension fund in 2011 and instead broadcast headlines about a “deficit” of €16.8m as opposed to a fully recognised loss for the year of €70m.
So, unless the Minister was expressing a personal opinion on RTE radio yesterday, she is likely to be repeating a view which has circulated in Cabinet meetings. Of course the official line from Minister for Finance Michael Noonan is that NAMA is “confident” it will recover €30bn of the €32bn it paid for the €74bn of face-value loans plus NAMA is “confident” it will recover any additional advances and the cost of operating NAMA. It is an “aim” of NAMA to also recover the €2bn of the €32bn consideration for the loans it paid with subordinated bonds which will only be honoured if NAMA makes a profit at the end of its lifetime, scheduled to be in 2020. However, even NAMA itself is not expressing “confidence” that it will in fact make a sufficient profit so as to pay the €2bn, which means the taxpayer will be on the hook for this. And remember whatever “confidence” is being expressed by NAMA, that confidence is based on NAMA’s projections which have not been fantastically accurate up to this juncture. The view on here is that if the economy does return to normality and grow at a steady 3% per annum pace in the second half of this decade, then there is a chance of NAMA breaking even or perhaps making a profit. But who knows.
I can tell you neither NAMA nor Minister Noonan has a crystal ball capable of predicting the future, and if NAMA thinks it has spreadsheet macros which can predict future property values, then NAMA should just give away all its assets and have its 220 staff focus on selling the bloody macro to asset management companies around the world who would pay more than €30bn to be able to predict future property values.
What is absolutely dumbfounding is the fact – confirmed by Minister Noonan in a response to a parliamentary question from the Sinn Fein finance spokesperson Pearse Doherty – that there has been no attempt to get the risk inherent in the NAMA operation transferred off the nation’s shoulders as part of the ongoing bank debt negotiations.
This omission represented unforgivable incompetence even before Minister Burton let slip that NAMA may face a €15bn loss.