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Irish Banking Inquiry: Ex-PM Brian Cowen apologises for 'hardship' during crisis

By John Campbell
BBC News NI Economics & Business Editor

Published
image copyrightPA
image captionBrian Cowen, pictured arriving at the Irish Banking Inquiry

The former Irish Prime Minister Brian Cowen has apologised for "hardship and distress" caused by the Irish financial crisis, which began during his tenure.

He told the Irish Banking Inquiry his government's austerity policies were a "necessary" response and that they had tried to "mitigate the human cost".

The parliamentary inquiry is examining the causes of the 2008 crisis.

Mr Cowen was prime minister (taoiseach) at the time the state needed an international bailout.

He was also its finance minister in the preceding years.

'First world infrastructure'

Mr Cowen has also given a combative defence of his performance as finance minister in the years before the crash.

He said his expansionary budgets in the preceding years were about improving public services and providing the Republic of Ireland with a "first world infrastructure".

media captionBrian Cowen apologised for the "hardship and distress" caused by the crisis

The former Fianna Fáil party leader defended property tax incentives as part of that, but said that with hindsight they could have been reviewed earlier.

He added that "no government in the democratic world" was budgeting for the possibility of the biggest financial crisis since the 1920s.

He said his policies as finance minister were "plausible" and "backed by international peer review".

Mr Cowen described as "simply not true" the allegation that he was beholden to property market interests.

'Reckless lending'

He outlined a series of measures he took that he said were an attempt to cool the property boom.

Mr Cowen blamed "reckless lending" and a "bonus culture" among the country's banks as a major cause of the crisis.

He was also critical of the performance of the Republic of Ireland's financial regulator, saying he should have been "more doubting and more questioning".

He said that the system of regulation in the Republic of Ireland and elsewhere had "failed completely".

Earlier, Mr Cowen said the government he led dealt with the crisis to the best of its abilities.

He also defended his government's decision to guarantee the liabilities of Irish banks in September 2008, a move that ultimately led to the international bailout in 2010.

'On our own'

He said the government had "one shot" in the most acute phase of the crisis, and the guarantee was the "most decisive" move it could take.

He added that it was "clear we we were on our own" on the night of the guarantee and that the wrong decision could have set the Republic of Ireland back by 25 years.

Much of the inquiry to date has focused on the events around the guarantee.

That decision effectively meant the Irish state and its citizens would have to cover the banks' losses.

Those losses ballooned to more than 60bn euro (£42.5bn), forcing the government to seek help from the European Union and International Monetary Fund (IMF).

Mr Cowen became prime minister and leader of the Fianna Fáil party in 2008, shortly before the global financial crisis began.

In the Republic of Ireland, it led to a deep recession, high unemployment and a series of austerity budgets.

Mr Cowen resigned shortly before the 2011 election in which his party's vote fell by 50%.

Related Topics

  • Republic of Ireland
  • Banking

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