Unrepentant Cowen stands by record as finance chief
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TAOISEACH Brian Cowen yesterday refused to apologise for any of the decisions he made as Finance Minister that may have contributed to the current banking crisis.
Mr Cowen said Irish taxpayers would have been exposed to even greater risks if the Government had not established the 'bad bank' National Asset Management Agency (NAMA).
The option of doing nothing had "very considerable risks", Mr Cowen said yesterday, making his first public remarks on Thursday's publication of draft legislation establishing NAMA.
Last night a spokesman said Mr Cowen had not attended the launch as it was a Department of Finance event.
The Taoiseach agreed to do an interview on NAMA yesterday following requests from the media, the spokesman said.
Apologise
When asked if he would apologise and accept that some of his decisions as Finance Minister contributed to the need to establish NAMA, Mr Cowen said: "I've taken responsibility for all my decisions over the past and during the course of my time as the Minister for Finance. We outlined the downside risks that taxed the Irish economy at the time.
"The unfortunate thing that has happened, which nobody could have forecast, least of all IMF, OECD or anybody else at the time, was the idea that all of these risks would come to pass at the same time, the impact it's had and the international system collapse worldwide."
Since last month's IMF report, Fine Gael has criticised the Taoiseach's ministerial record between 2004 and 2008, accusing him of pursuing policies that contributed to an unsustainable property bubble.
While Defence Minister Willie O'Dea yesterday admitted NAMA represented a "gamble", Mr Cowen insisted that ensuring a flow of credit to customers and businesses, protecting savings, and ensuring the best possible value for taxpayers was "terribly important".
"Without this arrangement the prospects of recovery would be greater delayed," Mr Cowen said. "There is a huge risk existing for the Irish economy were we not to take this step and this initiative."
The Taoiseach claimed it was "absolutely vital" that the Government moved to remedy the banking problems and restore confidence nationally and internationally. The option of doing nothing had its "very considerable risks".
Instead, NAMA would "minimise" the risk to the taxpayer.
"The purpose here is not to initiate a gamble. The purpose is to identify the value of loans in banks at the moment, the need to park those with NAMA and recover value for them over a longer time period," he said.
"The assumption that there are no present existent risks is a very wrong understanding of the whole situation."
Last night, however, Labour's Joe Costello claimed the Taoiseach's assertion that NAMA would get credit flowing was "absurd". He said that both bank of Ireland and AIB had been substantially recapitalised by the Government with taxpayers' money already for the specific purpose of enabling those banks to provide a credit flow to small and medium enterprises. But nothing had happened, he said.
Earlier, Finance Minister Brian Lenihan confirmed that the process of pricing the loans was almost complete and the values would be announced in mid-September in the Dail. He also admitted that NAMA would pay market value for some of the loans it acquired.
Value
"There are some assets that will not go beyond their market value. . . demographic factors and population trends may mean that some of the land acquired for development will never have any additional value and therefore must be pegged at current market value," he said.
And Mr Lenihan insisted the the developers and the banks would take the first hit, and not the taxpayer.
"If you look at the historic value of the properties secured by all these loans, then clearly if you take them at a peak in 2006, there's been a considerable reduction in their value since. . . the whole nature of this operation is that it is the developer and the bank that takes the first hit, not the taxpayer," he said.
But Fine Gael's Leo Varadkar claimed the bad bank scheme was a "gamble", and pointed to similar comments by Mr O'Dea and Peter Bacon, the architect of NAMA.
"Taxpayers are right to ask why Fianna Fail is so keen to gamble with their money without asking the banks, bondholders and institutional investors to take their fair share of the pain," Mr Varadkar said.
- ine Kerr Political Correspondent
