Friday 22 February 2019

Backlash to Kenny comments putting blame for crisis on public

December 4: ‘Let me say this: You are not responsible for the crisis’
January 26: ‘What happened was that people simply went mad borrowing’

Maeve Dineen in Davos

TAOISEACH Enda Kenny risked provoking a furious backlash last night when he blamed Irish people's "mad borrowing" for the economic crash -- just seven weeks after telling them: "You are not responsible for the crisis".

Mr Kenny's forthright comments at an elite economic conference in Switzerland were in stark contrast to the conciliatory tone he struck in his address to the nation on December 4.

In the wake of the Government repaying €1.25bn to Anglo Irish Bank bondholders, the Taoiseach told the World Economic Forum in Davos that Ireland's personal wealth during the boom was created "totally on credit".

"It was done between people, banks and a system that spawned greed to a point where this went out of control completely with a spectacular crash," he said.

Mr Kenny's comments echoed the much criticised "we all partied" remarks by then Finance Minister Brian Lenihan two years ago.

He was immediately accused of an "absolute contradiction" and "praising you at home, blaming you abroad".

His gaffe is the latest in a stream of coalition missteps following Finance Minister Michael Noonan claiming emigrants were making a "lifestyle choice" and Transport Minister Leo Varadkar's financial "bomb" going off in Dublin if the country did not repay its banking debts.

The contradiction between the Taoiseach's message last month and yesterday was attacked by the Opposition.

Fianna Fail's Niall Collins said Mr Kenny was clearly taking one approach at home and another abroad.

"While he's here, the priority is media management and preserving popularity. When he is abroad, the priority appears to be to avoid putting the blame where it belongs.

"Where was the Taoiseach's harsh criticism of European banks which helped flood Ireland with credit for years? He should be standing up for the Irish people and challenging the role of the banks when he has the chance," he said.

Sinn Fein's Padraig Mac Lochlainn said it was an outrageous analysis and accused the Taoiseach of blaming Irish people for a crash caused by aggressive lenders and greedy banks.

"This analysis that people in Ireland went drunk with credit, were reckless and they have to now be cleansed by a decade of austerity is very worrying."

Mr Kenny was speaking at one of the forum's main panel discussions entitled 'Rebuilding Europe'.

In a response to a question on what was happening in Ireland, the Taoiseach said: ". . .what happened in our country was that people simply went mad borrowing. The extent of personal credit, personal wealth created on credit was done between people, banks, a system that spawned greed to a point where this went out of control completely with the spectacular crash that you mentioned.

"The country borrowed over €60bn at excessive rates and the IMF eventually came in with the troika. . . so what has happened in the meantime. . . last year in a general election people gave the strongest mandate in the history of the country to my party to sort out this problem."

In a somewhat dry debate that failed to offer any real insight, Mr Kenny said the Irish people understood the "scale of the challenge" that faced them and said Ireland had measured up to every condition set out by the IMF-EU.

"It's got to be understood that people are very pragmatic and the political process and politicians should never underestimate the public's capacity to want to assist government in sorting out problems," he said.

Also in Davos, Mr Kenny said a decision on the need for a referendum on tougher EU budgetary rules would not be made until after the European leaders' summit, which takes place in Brussels on Monday.

The Taoiseach said there would be no discussion at next week's summit on reducing the level of debt associated with Anglo Irish Bank's bailout.

The European Central Bank is understood to be open to proposals to replace Anglo Irish Bank's €30bn promissory note or government IOU, for another type of debt repayment.

Mr Kenny said he spoke with the prime ministers of Austria, Italy, Spain, Holland, Finland and Denmark about the treaty and "the question of the flexibility for the promissory notes".

"But I made it clear that it is not related to this treaty business," he said.

Irish Independent

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