Nama: “Fit for purpose? The banks or Biffo’s Government?”

More on the Nama situation later, but for now MIriam Lord caught the atmosphere in the Dail yesterday with a cracking opening to her Parliamentary sketch. Enter the principals:

Then we had to endure The Head with Two Brians – not for the faint hearted. The sight of Cowen and Lenihan reassuring a nervous public that they will lead them on the path to financial salvation is not a good one.

“We need an Irish banking system fit for purpose . . . this is the way forward,” says BrianC.

“We are now in a position to stabilise the deficit and we are on a firm path to economic security,” soothes BrianL.

But they have a dark past – their previous promises haven’t worked out. Why believe them now? That’s what Richard Bruton wanted to know, when he said the latest phase in the Government’s attempt to save the banking system would lead to a doubling of the national debt and the mortgaging of our futures.

And the nub of the matter: the Nama ‘haircut’ (ie the government discount on the banks bad debts:

The language of Nama is impenetrable to most of us, which makes what went on in the Dáil all the more frightening. The Government had predicted the financial institutions would take a “30 per cent haircut” when they were taken over by Nama. But no. They were scalped. “The weighted average haircut across these institutions is 47 per cent,” Brian Lenihan told the chamber.

Then:

Richard Bruton and Joan Burton blew Lenihan out of the water. They focused on the disgusting amounts of taxpayers’ money needed to keep the developers’ piggy bank – Anglo Irish – from going under. “It is simply wrong for Ministers to come in here and pretend that taxpayers have an obligation to pay off all that money,” said Bruton. “It’s wrong . . . [that] it’s monopoly money. It’s no such thing. It’s hard cash that our grandchildren will have to pay.”

The Opposition was in no doubt that the decision by the Government to commit, for years to come, so many billions of taxpayers’ money to the banks will have disastrous consequences for the country. By the look on the faces of many across the floor, they aren’t so sure about it either. The shocking figures about Anglo Irish Bank hit them hard.

Lord conveys a vulnerability that is clearly unnerving for backbenchers of a party which has become accustomed to a permanent place in Government for the last twenty years. There will be much pain awaiting all of them when they go home to their constituencies tomorrow evening. If people vote with their wallets, this will cut deeply into the national pysche.

And that is without factoring into the titanic personal struggle the Minister of Finance is privately engaged in. Much personal trust is invested in him, both by his own party and (reluctantly perhaps) those on the opposition benches. If he is, by reasons of health is forced to step down, there is not a great deal of spare talent, or public trust, left to Biffo on the sub’s bench.

In which case a party coup may not be too far him….