Ministers fear NAMA will hit North property
THE Government was bluntly told yesterday that unilateral action by the National Asset Management Agency could pull down property prices over the border.
First Minister Peter Robinson and his Deputy First Minister Martin McGuinness told the Taoiseach Brian Cowen that an across-the-board approach to discounting property could devastate the North's emerging economy.
The view across the border is that Northern Ireland has not had a property bubble as occurred in the Republic, but that it had achieved a sustainable growth path until the international economic crisis slammed on the brakes.
If deep discounts on loan values are applied across the board by NAMA to investments both in the North and Republic, then Stormont fears that Northern assets would be hit disproportionately. Mr Robinson said NAMA "needs to be handled in a way that doesn't swamp the property market in Northern Ireland".
And Mr McGuinness added: "NAMA is going to have an im-pact in the North. It's important to put in place a mechanism whereby that can be managed."
Green Party minister Eamon Ryan suggested in recent weeks that up to one-third of the affected loans could be in the North. But the proportion is thought to be less -- possibly up to one-fifth.
The value, according to different yardsticks, could be anywhere from €7bn to €18bn, based on their nominal worth and an "impaired" reassessment. The total writedown could thus be in the order of €10bn in a worst-case scenario.
The North-South Ministerial Council meeting in Farmleigh yesterday decided that Finance Minister Brian Lenihan and Northern Executive Finance Minister Sammy Wilson would "share information in confidence". This was to make sure that action would be taken in future in relation to impaired loans "in a co-ordinated way", the Taoiseach said.
Mr McGuinness said the council had agreed that both finance ministers would report jointly to its next meeting on NAMA because of the threatened impact on Northern property values.
Mr Cowen said some of the assets to be taken over by NAMA were in the North. "It's important that we fully agree on the way forward, and that both ministers meet to consider the implications."
Mr Cowen added that the way forward was "obviously a matter of co-ordinating policy positions" between the two jurisdictions.
Northern Finance Minister Sammy Wilson was not at Farmleigh yesterday, but was now likely to meet Mr Lenihan "within weeks", officials said.