NAMA plan wins EU approval
The Government’s plan to create the National Asset Management Agency (NAMA) won approval from the European Commission today.
The move paves the way for the transfer of €80bn of toxic property loans from the country’s lenders to the newly created agency.
The commission said the plan to set up NAMA is in line with guidelines governing state aid in the 27-nation European Union.
“Ireland’s financial sector has been one of the most affected by the global financial crisis in Europe and the burst of the Irish real estate bubble has only compounded the problems,” said EU Competition Commissioner Joaquin Almunia in an e-mailed statement today.
“This impaired-asset measure, which is specifically targeted at real estate assets, is therefore key to cleaning up Irish banks’ balance sheets.”
The loans will be bought at a discount and their transfer to NAMA couldn’t start until the commission approved the plan.
The commission said it “will assess the compatibility,” and “in particular the actual transfer price, of the transferred assets” when they are separately notified by the Government.
“These individual reviews will include a claw-back mechanism in case of excess payments,” it said.
Finance Minister Brian Lenihan said February 22 that, subject to European approval, he expects the first loans to be transferred to NAMA within the next few weeks.