Policy added ‘fuel to fire’: report

GOVERNMENT policy helped to lead the country into economic crisis, according to the Governor of the Central Bank who went on to suggest that the government also made people believe “the party could last forever”.

Both the Honohan Report into the Irish Banking Crisis and the Regling Watson Preliminary Report on The Sources of Ireland’s Banking Crisis are scornful of government policy in the run-up to the banking collapse.

Central Bank Governor Patrick Honohan writes in his report: “Macroeconomic and budgetary policies contributed significantly to the economic overheating, relying to a clearly unsustainable extent on the construction sector and other transient sources for Government revenue (and encouraging the property boom via various incentives geared at the construction sector).