PEOPLE "went mad" borrowing during the boom fuelling the resulting crisis, Taoiseach Enda Kenny said at the World Economic Forum in Davos, Switzerland today.
He was explaining how Ireland’s economy went from boom to a spectacular bust.
“What happened in our country was that people simply went mad borrowing and 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 a spectacular crash,” he said.
“The country borrowed over €60bn at excessive rates and the IMF eventually came and the troika.”
He added that the General Election has given the Fine Gael-led government a mandate to sort out the problems and explain the reality of the scale of the challenge.
Mr Kenny said the reason why the eurozone crisis has stumbled along was due to incompetence by some governments and interminable wrangling between institutions and governments.
He also held a bilateral meeting with the Danish prime minister Helle Thorning-Schmidt, whose country currently chairs the rotating EU presidency.
Mr Kenny said he had spoken over the past few days with the Austrian, Italian, Spanish, Dutch and Finnish prime ministers on the telephone about the prospects for lowering interest rates and extending the payment time for the €32bn in debt.
He also met chief executives of a number of multinationals like Facebook and CitiGroup on the fringes of the meeting.
Earlier he called yesterday's €3.5bn bond swap a "sign of confidence" as the Government plans to wean itself off bailout money and re-enter open markets by the end of next year.
The National Treasury Management Agency, which manages the country’s debt, swapped 30pc of a bond due in 2014 to the following year in its first market move since auctions were suspended at the end of 2010.
"Yesterday's swap is an indication of a sign of confidence," Mr Kenny said in an interview with Bloomberg television at the World Economic Forum meeting in Davos, Switzerland. "But I recognise the scale of the challenge and just how far we have to go. We would expect to be out of the program by the end of 2013."
He added the swap or switch was a "tentative dip in the water."
"So we look forward to whenever they decide to do the same again," he said. "But we are in a programme and we continue to make progress and meet all the conditions set down by the troika and ourselves."
The EU/IMF/ECB troika has agreed to look at ways of reducing the country’s bank debt by focusing on €31bn of promissory notes or IOUs related to Anglo debt.
"The troika themselves now realize that perhaps greater flexibility could be shown to a country like Ireland which had to borrow very excessively before the facilities of the EFSF and the ESM actually came into being," Mr Kenny said.