Europe demanded Nama ‘fire sale’ during economic crisis

THE chief executive of Nama has said the European Troika tried to force him to ‘fire sale’ its assets at the pit of the economic crisis in 2011.

A sale would have cost taxpayers as much as €14bn, which was recovered by selling assets more slowly as the economy recovered, members of the Dáil’s Public Accounts Committee heard yesterday.

Nama CEO Brendan McDonagh described an extraordinary level of tension between the agency and the members of the European Commission, IMF and European Central Bank (ECB) during the early period of the bailout.

At one meeting, Mr McDonagh said, he had “40 people in a room shouting across the table”. A senior ECB official “stormed out” of the meeting because Nama would not speed up sales, he said.

The ECB could not be reached for comment last night. It is understood that the ECB wanted Nama to sell assets faster so that it could redeem €30bn of Nama bonds owed to the Irish banks. The banks were using Nama bonds as collateral to borrow funds from the central bank – which the ECB was keen to get back.

“And they would be shouting across the table at me, saying ‘Why aren’t you selling more? Why aren’t you generating the cash? You are too slow at generating the cash’,” Mr McDonagh said.

The revelation is a new insight into the degree of tension between members of the Troika and Irish officials.

Nama said it now expects to return €3.5bn to the Exchequer when it is due to be wound up at the end of next year – the surplus after the agency’s original €32bn of debt has been repaid and the bulk of assets sold off.

In relation to the housing crisis, the Nama chief said some public and media discussion of the crisis tended to be “overly simplistic”.

“The reality is that you cannot fund the development of a residential site if it is not commercially viable to do so,” he said.

Under European State Aid rules, even the Government is forbidden from developing sites that would not be viable for private development, he said.

He had ‘40 people in a room shouting across the table’