Nama cleared by Europe over State aid complaint
A complaint by five of the country's biggest developers that Nama breached the EU's rules on State aid by providing funding at preferential interest rates to Nama-supported developers has been formally rejected by the European Commission.
In a ruling delivered yesterday, the Commission's competition commissioner, Margrethe Vestager, said that Nama had "acted as a private operator would have done, and in line with its objective to obtain the best possible financial return for the State and Irish taxpayers".
The European Commission also dismissed the claim by developers Michael O'Flynn, Paddy McKillen, David Daly, Marlet CEO Pat Crean and MKN Group director Brian McKeown that Nama benefitted from various illegal State aid measures, including a State guarantee on its funding.
Referring to this specifically, the Commission said the guarantee had already been provided for as part of decision to approve Nama's establishment in 2010.
Responding to the ruling, the group of five developers said in a statement that "it was impossible to rationalise the decision given the evidence available, the actions of Nama and changes in Nama's operations and interest rates since the complaint was made and indeed recent comments by the Taoiseach in relation to Nama and State aid".
While they said they had always accepted that Nama had a right to fund development if that would further its objectives to maximise the return for the taxpayer, they believed that the agency was "not adhering to its remit" and was "becoming a full scale property developer... operating with a distinct advantage over real market operators".
Read more: Background to Irish developers' complaint
On this, the group said: "The main thrust of the complaint was the transformation of Nama since 2015.
"This has not been addressed at all in the decision. This is most alarming and undermines the credibility of the decision."
While noting the Commission's ruling in favour of Nama, the developers said they would now await the publication of its full decision and "seek to reconcile it with the Taoiseach's acknowledgement last week that it would constitute State aid if the remit of Nama were changed, or if it would otherwise be transformed to be a property developer".
The group was referring to a statement made by Taoiseach Leo Varadkar in the Dáil on January 16 last, where he said: "If Nama was competing with the private construction sector in the private rental market and the private housing construction market, that could constitute State aid."
Welcoming the European Commission's ruling in Nama's favour, Minister for Finance Paschal Donohoe said yesterday that it would now allow the agency to continue to work on maximising the number of housing units that are delivered from sites owned by its debtors and receivers.