Today in Selective Quotations: Sinn Fein Fiscal Treaty Edition

Someone has just shown me a leaflet distributed by Sinn Fein promoting the case for a No vote on the Fiscal Compact treaty. The back page contains quotes titled “What the Experts Said”.

One of the quotes is from me. It says:

… the economics of this treaty are pretty terrible …

Did I say that? Well, yes, I uttered those words at a meeting of the Oireachtas Committee on European Affairs. Here‘s what I said without the dots

All that said, although I think the economics of this treaty are pretty terrible, on balance, the arguments favour Ireland’s signing up to it.

The two other economists quoted are Colm (“Voting No is a Leap in the Dark that We Can’t Afford“) McCarthy and Seamus (“there is little to be gained from rejecting the Treaty“) Coffey.

The other expert cited is Jack O’Connor, President of SIPTU.

I’ll leave it there.

No Mr. Noonan, NAMA Does Not Borrow From the ECB

One of the great myths about the Irish economy that has circulated in recent years is the idea that the National Asset Management Agency (NAMA) has borrowed money from the European Central Bank. I tried on various occasions in the past to observe that this is not the case without having any impact. However, I had hoped that the people running Ireland understood how NAMA works. Apparently this was too much to hope for.

Here‘s Minister for Finance, Michael Noonan, in the Dail yesterday (H/T NAMA Wine Lake):

The money which we accessed for bridging finance from NAMA was money which is due to be repaid to the ECB for the loans it gave to NAMA to acquire the impaired assets in the bank. Again, it is ECB money that is providing the bridge. What will happen is that when the circle is completed and the shareholders give their consent, which is my expectation, the NAMA funds will be restored and NAMA will do what it intended to do last month, namely, it will repay another portion of what it owes to the ECB.

Just for the record (and I know now for sure I’m wasting my time) NAMA has issued bonds to the Irish banks in return for property assets. It can redeem those bonds as it acquires cash for the property assets. The bonds can be used by these banks as ECB-eligible collateral. However, NAMA is not a bank. NAMA is not ECB-eligible counterparty. NAMA has never borrowed, and will never borrow, from the ECB.