Saturday 24 September 2016

'When I handed over we were in a good position' - Ahern remains defiant

Former Taoiseach admits he allowed a 'ghastly' over-reliance on tax from property

Colm Kelpie and Clodagh Sheehy

Published 17/07/2015 | 02:30

Bertie Ahern, arrives to attend the banking enquiry
Bertie Ahern, arrives to attend the banking enquiry
Bertie Ahern told Michael McGrath, above, he would have liked to have stayed on as Taoiseach for another 18 months
Pearse Doherty

Former Taoiseach Bertie Ahern says the economy was fundamentally sound when he stood down in 2008 - just six months before the start of the recession and the banking crisis.

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Mr Ahern accepted there was a "ghastly" over-dependence on tax from property under his watch.

And the former Fianna Fáil leader said it "breaks my heart" that the last few years had been extremely tough on many ordinary families.

The former Taoiseach admitted to the Banking Inquiry that he did make mistakes "but so does everybody who governs".

"Of course I apologise for my mistakes but I am also pleased that I did get a lot of things right," he said.

Yet when asked if he believed the economy was fundamentally sound when he left office, Mr Ahern flatly replied: "Definitely."

"When I handed over, we were still in a good position. Of course, I wish the recession did not happen. However, it is disingenuous to suggest that all the gains this country made have been wiped out," he said.

Mr Ahern told the committee that as head of government he accepted responsibility for the over-heating of the property sector but he took no responsibility for what was happening in the Central Bank or the offices of the Financial Regulator.

"None," he reiterated. "So I take stick for lots of things but not stick for something I had zero control over," he said.

Mr Ahern's testimony came as the European Commission claimed the bank guarantee was "too generous" and played a major part in triggering the need for the Troika bailout.

The Commission alleges the Government didn't understand the nature of the banking collapse and ultimately turned a financial crisis into a sovereign debt crisis. It lays the blame for the bailout on the bank guarantee but says not burning bondholders was correct.

Read more: Lise Hand: A bewildering spin on the merry-go-round that is Planet Bertie

He accepted there was a "ghastly" over dependence on tax from property under his watch.

The ex-Fianna Fáil leader said it "breaks my heart" that the last few years had been extremely tough on many ordinary families.

Mr Ahern also told the Banking Inquiry he believed Irish banks should have a levy on their profits forever more.

He agreed the extension of property tax reliefs helped and sustained a property bubble, although he says he was not aware of the bubble until after he left office.

The former Taoiseach admitted to the Banking Inquiry he did make mistakes "but so does everybody who governs".

"Of course I apologise for my mistakes, but I am also pleased that I did get a lot of things right," he said.

Mr Ahern's view was that while there were errors, during his three terms as Taoiseach "Ireland finally caught up with and then surpassed average EU living standards".

He wished the recession had not happened, but "it is disingenuous to suggest that all the gains in this country made have been wiped out".

"Those who say we squandered the boom forget that in my time as Taoiseach we actually recorded budget surpluses in 10 of our 11 budgets," he said.

Mr Ahern told the committee that as head of government he accepted responsibility for the over-heating of the property sector but he took no responsibility for what was happening in the Central Bank or the offices of the Financial Regulator. "None," he reiterated.

This was outside his control. "So I take stick for lots of things but not stick for something I had zero control over," he insisted to Deputy Eoghan Murphy.

Mr Ahern described to Sinn Féin's Pearse Doherty how, when too many homes were being built, "I thought we could manage our way through".

When he came into office the number of builds was low and the experts believed if the number could be brought up to 60,000 a year that would take the heat out of the property market.

The boom "got boomier" when it went over that figure but he said he was not aware of the bubble until he had left office in 2009. He was aware of the overheating but did not see "this was heading for bust".

Asked by Fianna Fáil's Michael McGrath whether personal issues raised by the Mahon Tribunal had affected his job as Taoiseach, Mr Ahern said he did not give much time to it. Initially he had ignored the tribunal which was to his own detriment later.

When it became a daily issue not just for him but for his cabinet colleagues, he agreed it had led to his resignation as Taoiseach. He would have liked to stay another 18 months.

On light touch regulation, he told Senator Michael Darcy he believed "maybe naively that the Central Bank and the regulator were on top of these issues".

When he found out the numbers in supervisory roles for the banks, he said: "I was horrified."

He told Independent Senator Sean Barrett the profits of the banks were massive, more than other banks in the European banking system with only a handful of people regulating them.

There had to be another system but he also believed "the banks should have a levy on their profits forever more".

Asked about Fianna Fáil's relationship with property developers with particular reference to meetings at the Galway races, Mr Ahern dismissed this as "no big deal".

He personally did not have much interaction with developers. He said he did meet with the Construction Industry Federation because they were one of the social partners but it was "not that many meetings".

He said Fianna Fáil was wrong to abandon the Galway tent as a fundraiser and he did not accept it left a grubby impression.

"It was a bit of craic, the rest of fundraisers were nuisances."

Irish Independent

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