MINISTER FOR FINANCE Brian Lenihan has denied that the government has been backed into its four year plan by the EU.
In an interview this evening with Matt Cooper on Today FM, Lenihan said Europe hadn’t forced the government into anything; rather, “this is the classic way of handling a banking crisis.”
He said the main problem with Ireland’s banks is that they became so big relative to size of the country.
He said: “We are engaging in external assistance to ensure [the banks are] sorted out once and for all”.
Lenihan said that the property bubble burst had huge implications for bank balance sheets, and when NAMA went in, it established the bottom line on their losses.
When pressed on ministerial and TD salaries, the minister said that last year’s budget cut those salaries to correspond with those of other small countries. He said those kinds of cuts were not dealt with in the plan because while they generated a lot of air waves, they did not generate much in terms of cuts.
Cutting a deal
Speaking about ongoing EU and IMF negotations, Lenihan said that it was important the government ensured that the nation’s debt doesn’t rise to unsustainable levels.
He refused to say if he was prepared to walk away from the negotiations if they prove really unfavourable to Ireland, saying he would not discuss his tactics.
He said that suggestions Ireland should leave the euro were not realistic, and said he did not agree with the premise of Morgan Kelly’s recent article about an impending mortgage default crisis. He added that the IMF and EU didn’t see the evidence for his recent article when they arrived in Ireland, either.
When Cooper asked him about his interest in the Fianna Fáil leadership, Lenihan said he was focused on getting a majority vote behind the Budget next month, and was “satisfied that would be the case”.
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