Saturday 20 January 2018

Kenny blames EU and ECB as he seeks debt deal

Shane Hickey London

TAOISEACH Enda Kenny has blamed decisions made by the EU and European Central Bank for compounding errors made by Fianna Fail as the economic crisis hit.

Mr Kenny continued to lobby for deals on the country's debts as he pointed to the role of "Brussels and Frankfurt" in the banks being bailed out at a cost of €64bn to Irish taxpayers.

He said this was the equivalent of more than 40pc of GDP – or €35,000 for every household in the country – and more than 10 times the cost of bank rescues in any other eurozone country.

Mr Kenny said if it had not been for the "uniquely onerous burden" of the banking bailout, Irish public debt levels would be below the eurozone average.

"This policy of socialising the costs of private failure was in the first instance the responsibility of the previous Irish Government," he said in a dig at Fianna Fail.

"But the error was compounded when the continuation of this policy became, in effect, a condition of the 2010 bailout programme required by Brussels and Frankfurt.

"There was fear that a bank failure in Ireland would unleash panic in the financial markets across the eurozone."

During a whirlwind tour of London yesterday, the Taoiseach said the "crisis is not over" and called for Europe to bear some of the burden of decisions made following the crash.

"The principle that there can be no shared European taxpayer responsibility for banks without shared control and super- vision is reasonable," he said during an address in the City of London. "But the corollary must also be true: where the policy for dealing with bank failures was determined at European – and not national – level, so too must the burden of the legacy costs of those policies."

Reckless

Mr Kenny gave a series of addresses ahead of St Patrick's Day as part of delivering a message of "determination, faith and confidence" in Ireland.

The Taoiseach said the banks – which engaged in years of "reckless lending" – now need to cut costs and return to both profit and private ownership.

"And after a decade of a property boom and bust, there is a need for the banks to re-skill in order to improve their ability to lend prudently into the real economy," he said.

Speaking at the London School of Economics, Mr Kenny said there was a new confidence in Ireland, and the country was now more competitive than in the past few years, buoyed by the return to markets.

"The current crisis, however, is certainly not over, but the euro and the EU are in calmer waters than they were even a year ago," he said.

Mr Kenny said the debt now weighs heavily as Ireland seeks to fully re-enter the markets at sustainable interest rates.

"A key priority for the Government has been to ease the bank debt burden on Irish taxpayers and to clean up our banks so as to support economic recovery," he said.

"Within weeks of coming into office, we recapitalised and restructured our banks, reducing their number and putting in place new boards and management teams."

Irish Independent

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