I share the blame for mess we're in -- Cowen
FORMER taoiseach Brian Cowen is still wondering where it all went wrong.
The ex-Fianna Fail leader has finally admitted that his Government helped to mess up the country -- but he spoke out from the other side of the Atlantic.
Mr Cowen said: "All in authority have to take their share of responsibility for our present dilemma, and I, taoiseach at the time and a former minister for finance, do so more than most."
However he defended his handling of the banking crisis and reiterated his belief that Europe is duty-bound to let Ireland restructure the bank debts his administration agreed to.
In his first public statements since his ousting from office last year, the Offaly man told a closed event at Georgetown University, Washington, that restructuring the banking debt could "help" Ireland's "adjustment path and return to markets".
The Government is trying to change the terms of the IOU so Ireland no longer has to fork out €3.1bn a year to the bust banks, now collectively known as IBRC.
"The next reform must involve a deal on the Anglo Irish Bank promissory notes (IOUs)," he said.
Mr Cowen admitted that the promissory notes deal which his government committed to needed to be restructured, but he added that Fianna Fail made the right decision on Anglo Irish Bank in stressful times.
"The euro area policy of 'No bank failures and no burning of senior bank creditors' has been a constant during the crisis," he said. "And as a member of the euro area, Ireland must play by the rules." In Ireland's case, this meant bailing out Anglo and Irish Nationwide to the tune of €30bn and using the IOUs because the Government didn't have the resources to do it in cash.
Changes to Europe's bailout fund last July mean it will now be able to give struggling countries money to rescue their banks. Mr Cowen said those changes should open up ways to refinance Anglo's bailout.
One of the things Mr Cowen's Government is most heavily criticised for is the blanket guarantee infamously granted in the middle of the night in September 2008, that left the taxpayer on the hook for hundreds of billions of bank debt.
"Whether a narrower guarantee would have staved off an implosion of the banking system at a lower cost to the state is a matter for economic historians to ruminate on," Mr Cowen said.
"We had to deal with this crisis in real time. Our view at the time was that we would get one shot at calming the markets."