Cowen should admit to a mess of his own making

I WISH to highlight the inaccuracy of Taoiseach Brian Cowen’s recent suggestion that our current financial difficulties are global in origin. This is a totally disingenuous attempt to shift the blame from his own gross mismanagement.

Cowen’s philosophy to date has been:

Do no interfere with the free market thereby allowing an enormous housing bubble to develop.

Do no interfere with a bank regulator who appears to have done nothing to control banks.

Do not heed the Central Bank governor who maintained he regularly warned of the housing market overheating, posing particular dangers if it coincided with outside factors.

Do not heed documented reports that 100% mortgages were the last phase in the Japanese market before their property bubble burst.

Do not use commonsense that says you should not use windfall taxes to expand the public sector by 86,000 people (equal to 45 Dells).

Result: international investors say we are high-risk as a country and put us on negative watch alongside Greece and then impose a surcharge of 2% above and beyond the normal cost of borrowings. Homeowners are now in negative equity pain and many face the prospect of losing the roof over their heads.

What happens next?

Global storms enter the Irish financial scene and find our banks weighed down with property lending backed by falling assets. Credit flow stops and workers are let go. An appalling mess that should never have happened.

Had Mr Cowen governed and steered the boat correctly we would have been in a safe harbour when the international storm struck. Homeowners and banks would not have been over-borrowed. Yes, we would have been damaged to some extent by the international storm but nothing like the extent of damage now being experienced.

So the message is clear: international investors are charging us 2% more on the now necessary borrowings because of domestic mismanagement and not because of the global crisis. So Mr Cowen should stop blaming the global recession for all. Admit we were in a precarious position beforehand.

Taoiseach, please apologise to the people for making a mess and leave office. Let the brave get on with salvaging the wreck. It will be painful but it can be done. This time we will build on rock foundations, not on sand.

Please do not forget to take with you the other Brian and all the Marys.

I understand the borrowings have risen from e50,000,000,000 (make sound smaller, say e50 billion) to e76 bn since January 1, 2009, with a surcharge of e1.5bn per annum or about e30m per week. The full interest weekly cost is about e90 million.

Pat Burton

Cloghroe

Blarney

Co Cork