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Saturday 30 August 2014

Fionnan Sheahan: Brian crying wolf well after pack has arrived

Fionnan Sheahan

Published 25/04/2011 | 05:00

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Brian Lenihan was forced into accepting a bailout by the European Central Bank. Well, according to Brian Lenihan.

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This is the same Brian Lenihan who told the nation two years ago that "the worst is over" and "we have turned a corner". The same Brian Lenihan who said the bank guarantee would be the "cheapest bailout in history".

The same Brian Lenihan who briefed Cabinet colleagues as they proceeded to claim reports of an imminent bailout were "fiction". And the same Brian Lenihan who Fianna Fail colleagues say did "encourage dissent" against Brian Cowen and told backbenchers to "look at the numbers", despite his protests to the contrary.

Yes, the same Brian Lenihan who discreetly attacked Cowen after the general election proclaiming he had to provide leadership because the former Taoiseach didn't.

In each of these cases, there is an apparent contradiction between what Brian Lenihan said and did at the time and what he subsequently said happened.

Brian Lenihan will go down in the history books as the Minister for Finance when the country signed over its economic sovereignty to outside institutions. Clearly he doesn't want this to be his legacy.

The former minister is also a member of the party which served in government for the 14 years that saw the rise and fall of the Celtic Tiger.

On Fianna Fail's watch, the country became overly dependent on an unsustainable property boom which fuelled increased spending and cuts in taxation.

During the party's term in office, the light-touch regulation of the banking sector was also championed.

Lenihan can be credited with not being part of the Cabinet during this period of folly.

He became a Cabinet minister in 2007 after being repeatedly overlooked in the previous five years. But Lenihan was in charge when the bank guarantee was signed, which inextricably linked the bank debt to the sovereign debt.

And he was Finance Minister during the subsequent failed efforts to shore up the banking crisis and the deterioration of the public finances.

No amount of rewriting of history can separate Brian Lenihan from the handling of the economic crisis and the ultimate arrival of the IMF, European Commission and European Central Bank.

Micheal Martin tried during the 2011 General Election campaign to present himself and Fianna Fail as a shiny new version of the same party that was in power since 1997.

The public didn't buy it from Martin and they're not going to buy it from Lenihan either.

Lenihan's latest thesis that "the major force of pressure for a bailout came from the ECB" is nothing less than a self-serving effort to distance himself from the decision.

What's particularly annoying about Lenihan's vain attempts is he knows better after being at the heart of the crisis for his three years as Finance Minister.

He is well aware the €130bn provided to the Irish banks by the ECB is the only reason the banks were surviving.

The new line from Fianna Fail that the State didn't need a bailout last year because it had enough funding into this year ignores the fact the money was eventually going to run out in the middle of 2011 and the ECB's lifeline was staving off a collapse of the banking system.

From being the darling of his party, Lenihan's popularity took a nosedive as he presided over the bailout.

His dual claims of showing leadership and defending the economy simply don't stand up to scrutiny. He is the figure who didn't speak out when Cowen's flawed leadership came under question last September after the Galway drink-in affair or when Martin made a challenge at the start of the year.

And he allowed the public to be misled on the bailout negotiations when his ministers claimed reports were "fiction".

"I was in very difficult negotiations. We were simply having exploratory discussions. I didn't feel that it would be the appropriate time to alert the public generally as to the fact we were having such discussions," he said. "I'd have weakened our diplomatic hand in that regard," he added.

Instead, he allowed the destruction of the public's trust in its Government -- a decision which contributed to the backlash at the polling booths in February's election.

Fianna Fail's creative narrative on the bailout puts forward the notion that the bailout was unnecessary. Putting off the bailout for another six months might well have suited the party's agenda at the time. If the party had got to a general election without the necessity for a rescue package, then the punishment meted out by the voters might not have been so bad.

But the first action of a new government would still have been to sign up to a bailout as the rate of interest being charged to Ireland to borrow funds on the international markets was prohibitive.

Not in Lenihan's world though. It's all the ECB's fault -- nothing to do with him, his Government or his party.

Lenihan has become the boy who finally cried wolf -- only after denying the very existence of a rampaging pack of wolves all along.

Irish Independent

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