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The BBC bailout documentary: some choice quotes

Dan O’Brien’s half-hour programme on Ireland’s economic downfall gets its first airing. Here are some select excerpts.

Image: Julien Behal/PA Wire

BBC RADIO 4 this afternoon broadcast a documentary made by the Irish Times’ economics editor Dan O’Brien, documenting the various developments that led to Ireland accepting a €67.5 billion bailout fund from the European Central Bank, European Commission, and International Monetary Fund last November.

The half-hour programme is available in full on the BBC’s website, but below we have taken some excerpts from the transcript to help give a sense of just how opposed the Irish and European fronts were to each other – and how the international troika was not always singing from the same hymn sheet.

Brian Lenihan, former Minister for Finance:

[ECB president Jean-Claude] Trichet wrote to me. He raised the question about whether Ireland would be participating in a programme at that stage. I rang Mr Trichet after receipt of the letter. [...]

But it was clear to me at that stage that there was a serious issue for Ireland, and I said it was important that we discuss his concerns. And we agreed that on the following Sunday there would be an official level discussion about these issues, in Brussels.

I was in very difficult negotiations. We were simply having exploratory official discussions and I didn’t think that would be an appropriate time to alert the public generally as to the fact we were having such discussions. I’d have weakened our diplomatic hand in that regard.

Jorg Asmussen, Germany’s deputy finance minister:

It was made very clear to the Irish finance minister that it is not just about Ireland – it was made very clear that his decision has an influence on the economic wellbeing of other parts of the Eurozone. The functioning of the currency unions was at stake.

Patrick Honohan, governor of the Central Bank of Ireland:

I do apologise for that [Morning Ireland interview]. It’s a nightmare to have the central bank governor wake you up on the radio.

A friend texted me the night before to say, ‘Look, there’s an article in the Financial Times – a leader in the Financial Times saying, effectively, people should be planning on bank runs’. I thought, here’s a situation where there seems to be considerable public anxiety… I know what’s happening, I’d better get that out there.

Ajai Chopra, leader of the IMF delegation to Ireland:

What we were trying to do was avoid a situation where you had a fully-fledged bank run. The banks were already in cardiac arrest. We had a common purpose of making sure that what was already a difficult situation did not become totally chaotic.

We were prepared for pretty much any eventuality at that point.

Lenihan:

The European Central Bank appeared to have arrived at a view, at governing council level, that Ireland needed to be totally nailed down.

Seán Connick, junior minister in the Fianna Fáil-Green Party government:

When the announcement was made I felt very disappointed over the whole thing, disillusioned over the whole scenario – I genuinely didn’t sleep for about four nights.

It was a sense of, ‘My God, what have we done – what has happened here that we’ve ended up in this situation? How could we not have seen this and prevented it?’

Honohan:

Perhaps Irish people expected, as we have gotten from Europe in the past, a handout.

Asmussen:

For historic reasons Germany had a very strong attachment to the Deutschmark – if you replace it with the euro we promised to our citizens that the euro would be as stable as the Deutschmark was. The impression in Germany was that in the currency zone you need to show solidarity.

The general feeling here among many Germans was that if you need financial assistance from abroad, you cannot keep your corporate taxation rate at the lowest rate of the European Union. But it was not easy to explain to the parliament.

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Klaus Masuch, head of the European Central Bank mission to Ireland:

People in Ireland were not aware of the enormous support that they get from the Eurosystem. This is a privilege, of course. The partners in the Eurozone also expect that every partner – every government in the Eurozone – is doing its own homework. This means keeping public finances stable and, of course, keeping the banking sector stable.

The Irish government decided on its own to seek help. We are not pushing – we are advising the government. It is important, It hink, for the people to understand that the pgoramme is the consequence of bad policies in the past – this programme does not cause further problems, it solves problems… We have not pushed anybody.

Eamon Ryan, former Green Party minister:

We met that weekend [after the bailout was confirmed] and we just had a very strong sense that the introduction of the IMF required us to have an election. It was that moment in time when we said, ‘No, it is not tenable… for this government to continue on as if nothing had happened – as if this isn’t a game-changer’.

Amadeu Tardio, spokesman for European economics commissioner Olli Rehn:

Some Irish citizens are sometimes upset, and they perceive the European Union as a very severe referee, imposing a sanction on the Irish taxpayer…

I hope that with time, and with lost of humble explanation, pedagogy, we can tell the Irish citizens that our support was meaningful – that there is a concern about the welfare of the Irish citizens behind our actions – and that it was very important to provide this support.

Lenihan:

It would be fair to say that the main force of pressure for a bailout came from the ECB. Yes. I would say that.

I had fought for two and a half years to avoid this conclusion, and now we were at it. I saw that Ireland’s financial survival was very much an issue from late 2008 on. I had such a fierce struggle to bring my country and my colleagues with me… I believed I’d fought the good fight… and now hell was at the gates.

I have a very vivid memory of going to Brussels on the final Monday to sign the agreement and being on my own at the airport, and looking at the snow gradually thawing, and thinking to myself: ‘This is terrible. No Irish minister has ever had to do this before.’

I think [Irish euroscepticism] is a risk, yes. I haven’t publicly said this before now because I was anxious to get on with my job… I think Europe should realise that Europe is better working with an Irish government, rather than seeking to move Irish governments on.

Listen to the documentary in full at BBC.co.uk >

About the author:

Gavan Reilly

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