Nama On Wikileaks!

Nama might prove 'laboratory' for EU, leaked cable said...

THE FIANNA Fáil-Green government considered the National Asset Management Agency (Nama) “might prove to be a laboratory” for other European Union states faced with banks on the brink of collapse, according to the latest batch of diplomatic communications published by Wikileaks.

Ireland’s permanent Ambassador to the EU, Rory Montgomery, made the comment to the US ambassador to Ireland, Dan Rooney, at a meeting in Brussels in September 2009.

Mr Montgomery revealed the EU “was watching closely” the establishment of Nama.

At the same meeting he said that year’s budget would focus on cuts in public sector pay. The cable reports Mr Montgomery’s view was that “Ireland [was] paying too many civil servants too much to provide public services that could be provided for much less.”

Mr Rooney met EU commissioner Charlie McCreevy on the same trip. Mr McCreevy had advised the Fianna Fáil-Green coalition to act quickly in establishing Nama and moving the 2009 budget. “McCreevy, an ex-finance minister, said simply that his experience taught him that the government needed to act quickly to keep the public and press from dwelling on the negative. ‘If you wait,’ he said, ‘it’ll only get worse’,” the cable to the US State Department said. The batch of cables was published for the first time yesterday but was made available to some newspapers last year by Wikileaks.

They confirm Central Bank officials believed there was just 0.5 to 0.8 per cent of “impaired assets” in the Irish banking system when the Government’s blanket bank guarantee was introduced on September 29th, 2008.

In a meeting with US diplomats, Central Bank executive 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 Central Bank official, Gordon Barham, said impaired assets were mostly confined to loans to commercial property developers. When pressed, Mr Barham said the media had exaggerated the problem assets.

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

Report by JOHN COLLINS - Irish Times