Peter Bacon, the economic consultant who dreamed up the National Asset Management Agency and once advocated a cut in the national minimum wage, has charged the Irish Hotels Federation €60,000 for five weeks work. His report for the Federation, published last November, concluded that the country needed to close a quarter of its hotel rooms because the sector was insolvent.
A NAMA source has told The Sunday Tribune that the asset management agency could close down hotels under its watch if they aren’t making enough money.
NAMA is taking over €800 million in loans secured against Irish hotels and the NAMA source told the Tribune that “it may be better for some hotels to shut rather than draining developers’ resources.”
On the day that the bank loans transferred to NAMA and administrators were appointed to Quinn Insurance, the Revenue Commissioners issued the following press release:
Following a recent determination by the Appeal Commissioner, the Revenue Commissioners accept that cooking chocolate comes within the meaning of paragraph (xii) of the Second Schedule to the VAT Act, 1972 (as amended) and is therefore liable to VAT at zero per cent.
Welcome to the real world!
AIB is facing virtual nationalisation because of new rules on bank reserves proposed by The Financial Regulator, The Sunday Times reports. Such an action would mean taxpayers would be forced to invest billions more than they have already to keep the bank afloat.
Meanwhile, Nama officially becomes a reality today when the first tranche of loans are transferred from Irish Nationwide. All of the Sunday’s speculate the original haircut of 35% will now look more like a skinhead, with discounts of up to 60% being paid by the state on these loans.
The rest of the week will likely be filled with banking news as the full extent of the Nama bailout strategy becomes fully apparent. Guestimates range anywhere between €25 billion and €40 billion depending which commentator you choose to believe – whatever the final bill, taxpayers can expect to be footing it for generations to come.
The “big bang” is the theory that astronomers and physicists use to explain the formation of the universe. It is not a phrase you would ordinarily expect to find on the finance pages of the national newspapers but it has taken up residence there over the past few weeks as we await a series of announcements that will shape the banking sector, and thus the economy, of this country for the foreseeable future. There will be a statement from Nama (National Asset Management Agency) on the amount it plans to pay for the first €17 billion of bad debts it will accept from the banks.