Lenihan slip-up as he denies he said ‘the worst is over’

FINANCE Minister Brian Lenihan suffered an embarrassing slip-up at the launch of Fianna Fáil’s economics manifesto, denying remarks he made in his Budget 2010 speech that “the worst is over”.

Although these comments are on the Dáil record from December 9, 2009, the minister initially tried to suggest that he did not say this, before being forced to accept that these were, in fact, his words.

Mr Lenihan launched an attack on the opposition’s pre-election economic promises which he dismissed as populist and unrealistic.

But he refused to offer any apology for mistakes he made as Finance Minister during the country’s economic collapse: “I’m not going to say sorry for something I didn’t say,” he said.

The minister was later forced to backtrack and defend his remarks that the economy had “turned the corner” and “the worst is over” in his 2010 Budget speech, saying he still stands by them.

“I make no apologies for saying we turned the corner that year. We did,” he said. “Yes the worst was over then because we haven’t had any further decline since. We stabilised the employment position, we stabilised the public finances, that’s what’s happened. That’s the basis of those comments,” he said.

But the minister does not have any regrets about how he handled the crisis. “Reacting very fast as a firefighter to a fire, you would say would you prefer to put the hose here or there on certain occasions.

“But they’re matters of detail. The fundamental fact is that the Irish state was put on a path where the expenditure pattern was unsustainable and the tax element was unsustainably low and I said that in my first budget speech”

Fianna Fáil has not published an economic manifesto document ahead of the election but is promising to pursue its four year recovery plan outlining a €9 billion adjustment between now and 2014.

“We have done the heavy lifting to bring the public finances back under control and we have done so in the teeth of opposition from Fine Gael, Labour and Sinn Féin.

“But despite their vehement opposition only a matter of weeks ago during the budget debate, it is now clear they will not reverse any of our decisions,” he said.

Fianna Fáil is the only one of the three main parties who will impose further income taxes on those earning below €100,000. But “the bulk of the income tax adjustment has been done,” Mr Lenihan said.

He criticised Fine Gael’s proposals to raise VAT simply because they “want to promise people that you are not going to introduce any income tax increase”. He said it was “bad commercial judgement, bad business judgment, looking for what might be popular instead of what’s correct”.

He said opposition promises to “re-negotiate” the terms of the EU’s share of the bailout deal was not realistic. “We can have this illusion debate in Ireland about this as though we are back in the 1930s and we are talking about land annuities, or we can decide that we live in the real world. We’re part of a European currency system, we have a European Central Bank.”

Mr Lenihan accused Labour of “looking over its left shoulder at Sinn Féin and being outbid in the populist stakes”. Fine Gael, meanwhile, “is hiding behind the decisions we have taken”.

More word-play: ‘No, I never said I was too busy. What I said was that I was in a post that was essential to the country’s financial survival’

On the Fianna Fáil leadership:

* Tuesday, January 18: “I haven’t had time to organise a coup or a challenge in the past year.... I didn’t have the luxury of indulging my ambitions on this particular matter.” — in an interview with RTÉ’s Sean O’Rourke.

* Five days later on RTÉ’s This Week Programme:

Colm O’Mongáin: “You said before this you were too busy to be concerned with the self-indulgent concerns of somebody who wanted to be leader.”

Brian Lenihan: “No, I never said I was too busy. What I said was that I was in a post that was essential to the country’s financial survival.”

On the IMF deal:

* In an interview on BBC Newsnight on November 9, 2010, with Jeremy Paxman.

Brian Lenihan: “We intend to return to the markets next year, and we intend to fund ourselves. That’s our plan. ..

“And we’ve made a cardinal plank of our policy that we intend to pay our debts as a state, we will pay our way and we’re determined to do that.”

* Sunday, November 21, after several days of negotiations with EU/IMF team, Mr Lenihan said: “I will be recommending to the Government that we should apply for a programme and start formal applications.”

On Anglo Irish Bank

* September 2008: Mr Lenihan says the guarantee of the main banks — including Anglo — will not leave the taxpayer exposed. “I do not see a hazard or exposure from the decision I have arrived at, for the taxpayer has a vital interest in seeing that the bloodstream of our banking system is maintained.”

* October 2008: Brian Lenihan insists state investment in Anglo and the other banks will be absolutely the last resort. “The question of state investment is a very final option.”

* December 2008: Mr Lenihan announces he is prepared to pump €1.5 billion of taxpayers’ money into Anglo in return for a 75% stake in the bank. “The state is prepared to deploy its wealth to secure the banking sector in the interest of the whole economy. There will be no exposure to the taxpayer in this.”

* May 2009: He says the €1.5bn for Anglo will actually be €4bn.