Irish Banking Inquiry: Ex-PM Brian Cowen apologises for 'hardship' during crisis

BBC News

The former Irish Prime Minister Brian Cowen has apologised for 'hardship and distress" caused by the Irish financial crisis which began during his tenure.

He told the Irish Banking Inquiry his government's austerity policies were a "necessary" response and that they had tried to "mitigate the human cost".

The parliamentary inquiry is examining the causes of the 2008 crisis.

Mr Cowen was taoiseach (Irish prime minister) at the time the state needed an international bailout.

He was also its finance minister in the preceding years.

'Failed completely'

Mr Cowen said the government he led dealt with the crisis to the best of its abilities. He said that the system of financial regulation in Ireland and elsewhere had "failed completely."

Defending his time as finance minister, he said it was "simply not true" that he was beholden to property market interests.

He outlined a series of measures he took which he said were an attempt to cool the property boom.

Bank guarantee

He also defended his government's decision to guarantee the liabilities of Irish banks in September 2008, a move which ultimately led to the international bailout in 2010.

He said the government had "one shot" in the most acute phase of the crisis and the guarantee was the "most decisive" move it could take.

He added that it was "clear we we were on our own" on the night of guarantee and that the wrong decision could have set Ireland back by 25 years.

His written submission to the inquiry included a robust defence of his economic policies.

Much of the inquiry to date has focused on the events of 29 September 2008, when the Irish government agreed to guarantee the liabilities of the country's banks.

That decision effectively meant the Irish state and its citizens would have to cover the banks' losses.

Those losses ballooned to more than 60bn euro (£42.5bn), forcing the government to seek help from the European Union and International Monetary Fund (IMF).

Deep recession

Mr Cowen became taoiseach and leader of the Fianna Fáil party in 2008, shortly before the global financial crisis began.

In Ireland, it led to a deep recession, high unemployment and a series of austerity budgets.

Mr Cowen resigned shortly before the 2011 election in which his party's vote fell by 50%.

'Complacent'

In a speech in 2012, he admitted his government should have increased taxes and cut spending during the boom years.

He also said that regulation of the Irish banking sector had been "complacent and permissive".