Ireland courted excess in boom: US Ambassador
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Irish property developers "went too far" during the property boom, according to Dan Rooney, the US ambassador to Ireland.
“There were many developments all over the place: houses, buildings, different programs,” Rooney, 77, co-owner of the Super Bowl-winning Pittsburgh Steelers, said in an interview in his Dublin office. “We did the same thing on Wall Street. This seems to be human nature. We have to overcome it.”
Ireland's gross domestic product will shrink about 7.5pc this year. Home prices have fallen by about 45pc from their peak in 2007, and the Government is setting up a state asset agency to purge lenders of souring property loans.
“I knew coming here there was a problem with the economy,” said Rooney, whose father started the Pittsburgh team 1933. “But maybe it was a little deeper than I thought.”
The agency is a “necessity,” Rooney said, adding the economy still faces “major problems.”
“The leadership is doing everything they can. They are capable.”
Tough 2010
Rooney said the global economy is in a “tough situation” and will struggle next year before recovering. The so-called Celtic Tiger decade produced enough positive changes to help Ireland emerge from the recession, he said.
“The US has made the turn,” said Rooney, who took up his job in July. Ireland has “bottomed out, and is beginning to make a little bit of a turn.”
On May 4, President Barack Obama said he planned to raise about $190bn during the next 10 years partly by curtailing the ability of US-based multinationals to write off the costs of overseas units against domestic tax liabilities.
That sparked concern that US companies operating in Ireland including Microsoft and Intel, the largest maker of computer chips, may limit overseas investment.
Rooney said Obama doesn’t consider Ireland to be a tax haven and that US companies operating in the country aren’t going to be at a “grave disadvantage.”
“Are they going to pay more taxes?” he said. “We’ll have to wait to see.”
- Dara Doyle and Louisa Fahy
© Bloomberg
