Brian Cowen finally to give his side of the story to bank inquiry

After eight years, €64bn in bailout money, dozens of banking inquiry witnesses, and one hugely controversial blanket guarantee, former taoiseach Brian Cowen will finally give his side of the story on what caused the economic crisis.

Brian Cowen finally to give his side of the story to bank inquiry

The former Fianna Fáil leader will today attend the inquiry for the first of two nine-hour grillings, bringing the investigation to its key make-or-break period.

Mr Cowen became taoiseach in May 2008 after serving as finance minister for four years in the hope he would help the Celtic Tiger keep roaring after a short “soft landing”.

However, his tenure in high office became one of the most chaotic in Irish history, with the bank guarantee taking place four months later, followed by mass unemployment and emigration, the 2010 bailout, and a landslide election defeat.

Mr Cowen has largely stayed silent since resigning in January 2011.

However, over the coming week, his views on the crisis-filled era will come under intense national and international scrutiny, so much so that Dáil officials had to organise a second viewing room due to public interest.

The ex-Laois/Offaly TD will today be questioned on his role in the economic crash, with issues up to the 2007 general election discussed during the morning session and an examination of the run-up to the bank guarantee scheduled for the afternoon.

Issues will include boom-time giveaway budgets, the property market, lobbying, and why a “secret” group had reportedly been set up to examine a guarantee — a year before it happened.

Next week, Mr Cowen, will answer questions on the guarantee and subsequent bailout, including why he over-ruled the then finance minister, Brian Lenihan, to include Anglo Irish in the guarantee, and when he became aware that a bailout was needed. The issues will also be raised today in his opening statement for both sittings.

Further hearings are due later this month with Bertie Ahern, John Gormley, Mary Harney, and Taoiseach Enda Kenny, among others.

Meanwhile, the inquiry yesterday heard billions poured into Anglo Irish Bank is unlikely to be repaid.

Department of Finance second secretary general Ann Nolan said: “We won’t get our money back,” indicating it was the “overall net cost of the banking crisis”.

However, she stated she honestly did not believe failing to nationalise instead of guarantee in September 2008 made any difference, as the January 2009 nationalisation did not stop the outflow of deposits.

She said the “zombie” bank was ultimately nationalised because the State did not trust the firm and needed full oversight before further recapitalisation could occur.

Ms Nolan also said senior IMF officials Askoka Mody and AJ Chopra were in favour of Ireland burning bondholders but the ECB had held a very strong line against this.

She said the guarantee led to the bailout.

Ms Nolan said department officials were already examining the move in May 2010 as they wanted to go into talks with their own information.

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