Friday 13 December 2019

'I made mistakes but don't blame me', says Bertie Ahern as he defends role in downturn

Bertie Ahern, arrives to attend the banking enquiry. Picture credit; Damien Eagers / Irish Independent 15/7/2015
Bertie Ahern, arrives to attend the banking enquiry. Picture credit; Damien Eagers / Irish Independent 15/7/2015
Former Taoiseach Bertie Ahern arrives at the Oireachtas Banking Inquiry in Leinster House

Former taoiseach Bertie Ahern has accepted responsibility for the overheating of the property sector but said he takes no responsibility for what was happening at the offices of the Central Bank and Financial Regulator.

He said this was outside his control. "So I take stick for lots of things but no stick for something I had zero control over," he told the Banking Inquiry yesterday.

The former Fianna Fail leader, who served three terms as taoiseach, admitted he did make mistakes "but so does everyone who governs".

READ MORE: Andrew Lynch: Bertie's Teflon coating remains intact as he sails through a feeble grilling

Mr Ahern told the inquiry it "breaks my heart" that the last few years "have been extremely tough on many ordinary families, but the work of our democratic political system must prevail".

The former politician, who was taoiseach from June 1997-May 2008, added: "Of course I apologise for my mistakes, but I am also pleased that I did get a lot of things right."

READ MORE: Bank guarantee 'was too generous to bondholders'

He conceded that while he did not get everything right during his three terms as taoiseach, he could "honestly put my hand on my heart and say I did try my very best to do the right thing by the Irish people".

Mr Ahern emphasised that during his term as taoiseach "Ireland finally caught up with and then surpassed average EU living standards".

During a lengthy hearing, Mr Ahern said he wished the recession had not happened but "it is disingenuous to suggest that all the gains in this country made have been wiped out".

Despite the recession a lot of progress was still in place benefiting thousands of our citizens, he said.

"All the time, as taoiseach, what I wanted to do with budgets was to improve the quality of life for ordinary people and to provide services that our country did not have before," he stressed. "Those who say we squandered the boom forget that in my time as Taoiseach we actually recorded budget surpluses in 10 of our 11 budgets."

It was true there were some warnings about over-reliance on property, the inquiry heard.

"But it is important to be clear about the record. In October 2004, the IMF alluded to a possible overheating in the housing market even though, subsequently, they themselves and other economic commentators implied there was no bubble."

Mr Ahern said there was no doubt the housing boom, caused mainly by cheap credit due to low interest rates, had created a structural weakness in the economy.

The international downturn had ensured this has turned from a soft landing into a very hard one, he said.

"I wish this didn't happen and with hindsight, of course, I would have done things differently," he added.

He believed that "one of the lessons we should all take from this crisis is that maybe our politics needs to be less partisan and that as a small island we should all pull together".

Mr Ahern described to Deputy Pearse Doherty how when too many homes were being built "I thought we could manage our way through".

When he came into office the number of builds was low and the experts believed if the number could be brought up to 60,000 a year that would take the heat out of the property market.

The inquiry heard the boom "got boomier" when it went over that figure but Mr Ahern said he was not aware of the bubble until he had left office in 2009. He was aware of the overheating but did not see "this was heading for bust".

Asked by Deputy Michael McGrath whether personal issues raised by the Mahon Tribunal had affected his job as taoiseach, Mr Ahern said he did not give much time to it.

Initially he had ignored the tribunal, which was to his own detriment later. When it became a daily issue not just for him but for his Cabinet colleagues, he agreed it had led to his resignation as taoiseach. He would have liked to stay on for another 18 months.

He told Senator Sean Barrett that the profits of the banks were massive, more than other banks in the European banking system with only a handful of people regulating them.


There had to be another system but he also believed "the banks should have a levy on their profits for ever more".

Asked about Fianna Fail's relationship with property developers with particular reference to meetings in the party tent at the Galway races, Mr Ahern dismissed this as "no big deal".

He personally did not have much interaction with property developers.

He said he did meet with the Construction Industry Federation because they were one of the social partners but it was "not that many meetings".

He said Fianna Fail was wrong to abandon the Galway tent as a fundraiser and he did not accept it left a grubby impression of the party.

"It was a bit of craic, the rest of fundraisers were nuisances," he said.

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