A senior European Commission official has denied the commission, as member of the Troika, tried to “manoeuvre, push or threaten” Ireland to accept the November 2010 bailout, despite arguing the controversial move was “inevitable”.
The commission’s economic and financial affairs director genera, Marco Buti, insisted at the baking inquiry that he and other officials never acted inappropriately.
Speaking at the inquiry’s final day of public hearings, Mr Buti — in his position since 2008 — insisted the EC never forced Ireland to sign up to the 2010 bailout.
Responding to questions from Fine Gael TD Eoghan Murphy, Mr Buti said it is untrue to “characterise” the discussions leading up to the deal as an ultimatum: “I do not accept that characterisation of us manoeuvring Ireland into a programme. It was an honest assessment. We did not manoeuvre, push or threaten [Ireland into the bailout].”
Mr Buti again refuted the suggestion when it was put to him by Fianna Fáil finance spokesperson Michael McGrath, saying ex-Department of Finance secretary general Kevin Cardiff is wrong to suggest Ireland was “pushed, quite hard” into the agreement.
However, asked for his reason, Mr Buti said it was “inevitable” Ireland would need support given the “life-threatening situation” it was facing and the “unprecedented uncertainty” around Europe at the time.
Mr Buti criticised the scale of the September 2008 blanket guarantee as being “too generous... too large”, and it could only have worked “if you think it is a problem of liquidity and not insolvency, and it became clear quite quickly it was insolvency”.
Mr Buti said the move “magnified the fiscal impact of the banking crisis” which had been growing over the previous months.
However, he said any burning of the bondholders was ruled out two years later because risks of a “unilateral” decision such as “spillover” to other European nations “could not be disregarded” and that Ireland could have suffered significant “litigation costs”.
“We [the Troika] came to the common judgement that this was not the right thing to do,” he said, adding the ECB was “very forceful” in its view of the matter and that the EC did not wish to influence its partner in another direction at that time.
Mr Buti said at all times the EC was focussed on the long-term outcome for Ireland and other countries, and that while he accepted more could have been done to help people struggling during the bailout, the majority of its implementation was “smooth”.
He told the inquiry “memory is very short” and that the EC has a longer term aim than politicians, “including you all”, a point inquiry chair Ciarán Lynch said is “duly noted”.
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