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Bailing out banks was heroic -- Hurley

ONE of the key figures behind the blanket guarantee of the toxic bank debts has described as "heroic" the move which saddled the Irish taxpayer with mammoth debt.

John Hurley, the governor of the Central Bank during the height of the property boom, has commended the response of Ireland's senior officials in the run-up to the blanket guarantee of its toxic banks.

Hurley ended his disastrous seven years in charge in 2009 with a taxpayer-funded pension of €175,000, and a €525,000 lump sum, and has said nothing publicly since.

But details of what he said to the Wright Commission, which investigated the response to the crisis by the Department of Finance in 2008, have now been revealed.

This follows a two-year battle with the Department of Finance to force the release of key interviews with the Wright Commission.

The documents show Hurley believed that guaranteeing Anglo, Irish Nationwide and the rest of Ireland's toxic banks was the right thing to do.

"At that time no pan-European response mechanism had been put on the table," he said.

"[It's] important to judge what happened in the context of the time. All agendas were open and the response could only be described as heroic."

Two months later, Ireland lost its economic sovereignty when it was bailed out by the EU/IMF/ECB troika.

Prudence

Hurley also admitted that the Government spent money and pandered to trade unions "at the edge of prudence" during his time in the hot seat.

He said social partnership "damaged" flexibility and "fiscal discipline and the prism of competitiveness was lost".

The Department of Finance refused to release Hurley's interview and others on so-called public interest grounds. The Information Commissioner rejected its position.

Another leading figure at the time, David Doyle, the former secretary-general of the Department of Finance, put much of the blame for the financial meltdown on Brian Cowen, the then Finance Minister, who Mr Doyle claimed ignored warnings from civil servants in 2005 and 2006 about the economy.

Meanwhile, Charlie McCreevy, the former Minister for Finance, said the department was "good" at forecasting when he was in charge and gave "sound, independent, and well-argued" advice.

hnews@herald.ie


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