Thursday 22 March 2018

Cowen is wrong. Abolishing stamp duty is a necessity

The Taoiseach's recent speech on the economy was disingenuous and misleading, writes Marc Coleman

Marc Coleman

Marc Coleman

AS any reader of this column knows, it tries to be fair. If it criticises the Government for something done wrong, equally it isn't shy about saying so when it gets something right. So when it expresses the view that the Taoiseach's speech last Thursday was misleading, wrong and disingenuous, there is no political or personal bias behind this. That speech was misleading on the question of whether the Government was warned about the crisis, it was wrong on the question of stamp duty and it was disingenuous in how it divvied up blame for the crisis.

Let's take these three points in turn. The idea that no one warned the Government that crisis was going to occur is misleading. Certainly, it wasn't until Bear Stearns collapsed in March 2008 that the crisis became inevitable. But warnings signs from early 2006 were glaringly obvious, so much so that no government can be excused for ignoring them.

From just under €200bn in 2005, private lending was growing at 25 per cent a year and set to double by the end of 2008, which eventually happened. By 2006, warnings were coming from the highest possible sources. On June 22, 2006, Jean Claude Trichet specifically warned our Government to damp down mortgage lending: "There is a need to issue prudential warnings and messages. . . . The Irish authorities are aware of their capacity and influence in that respect and we are counting on them."

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