Lenihan accused of trying to avoid any responsibility for financial crisis

FORMER Finance Minister Brian Lenihan was accused of trying to escape taking responsibility for the banking crisis as he alleged the European Central Bank (ECB) pushed or “bounced” Ireland into seeking a bailout.

Minister of State for European Affairs Lucinda Creighton said Mr Lenihan was trying to absolve himself from the financial crash after an interview in which he claimed the ECB had formed the view that “Ireland needed to be totally nailed down”.

Taoiseach Enda Kenny hinted that Mr Lenihan’s comments about the last government’s relationship with Frankfurt, where the bank is based, warranted further investigation.

In a controversial BBC documentary broadcast yesterday, Mr Lenihan described the tense moments leading up to the announcement of Ireland’s bailout with Europe and the IMF in November last year.

“The European Central Bank appeared to have arrived at a view that Ireland needed to be totally nailed down,” he said.

When asked if the ECB bounced Ireland into a bailout, Mr Lenihan said: “I would say that, yes.”

He accused members of the ECB executives of briefing against Ireland and of “betrayal” and criticised some of the 17 governing board members of the bank for the “damaging” manner in which they had briefed some media about Ireland.

“On the betrayal issue, I did feel that some bank governors should not be speaking out of turn and that only the president should speak for the bank,” he said.

Ireland’s own Central Bank governor, Patrick Honohan, also described in the programme how he had been the first to admit, on the morning of November 18, that Ireland was preparing to access a bailout package worth tens of billions of euro.

This decision came, he said, when he learned the night before that an editorial was to appear in the Financial Times newspaper about Ireland “saying effectively people should be planning on bank runs”.

Ms Creighton said Mr Lenihan’s comments had raised a few eyebrows but also did not correspond with what the former finance minister himself had told the Irish people then.

“While representatives of the government at the time were flying back and forth to Frankfurt and to Brussels to discuss the impending fate of the Irish state, when questioned about it Brian Lenihan failed to give any sort of accurate account to the Irish people and failed entirely to explain to the Irish people what was happening and, in fact, denied that any bailout was likely and was imminent,” she said.

When asked about Mr Lenihan’s comments, Taoiseach Enda Kenny said: “I think that Brian Lenihan has given some of his version of these events.

“I don’t know exactly what happened at those discussions but clearly there is a lot more that we need to find out.”

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