00:00 Saturday 04 February 2012  Written by Editor

All of us did not go mad borrowing

TAOISEACH Enda Kenny needs to choose his words much more carefully when speaking about what caused the economic boom here to come to a shuddering halt, so as not to offend the sensibilities of those who did not lose the run of themselves financially during the Celtic Tiger era. The off-the-cuff sweeping statement he made at the economic forum in Davos last week that 'what happened in this country was that people simply went mad borrowing' was hurtful to the many who did not succumb to temptation and behaved responsibly, but are are now having to pay for the recklessness of others.

This particular remark, taken in isolation, was out of context with the declaration he has made at the start of his pre-Budget state of the nation-style address on television in early December that the people of Ireland were not at fault for the financial mess we are in. But, that was the only crumb of comfort he could offer then before going on to tell us that we would be paying the cost of the collapse for many years to come, so his remark in Davos was like taking away that lonely crumb of comfort from us.

While the general thrust of his summary of the causes of the Irish economic collapse he made there was correct and his frankness and honesty impressed his international audience at the Swiss ski resort, back here his poor choice of words proved upsetting to many. However, we are not one bit sorry for the politicians who took umbrage at this careless remark, especially those representing parties involved in the previous government because it was they who failed to ensure proper financial regulation and gave the banks more or less free reign to lend recklessly.

It certainly was rich of Fianna Fáil TD Neil Collins to ask where was the Taoiseach's harsh criticism of European banks which helped flood Ireland with credit for years? The said deputy seems to want to lay the blame at the door of the European banks - and they were undoubtedly part of the problem - but nobody put a gun to the heads of our own banks and all the people who availed of that money either.

The indisputable facts are that Fianna Fáil led three consecutive governments that, from 1997 to last year, presided over so-called soft-touch financial regulation that effectively gave the banking system here carte blanche to behave as they pleased - many of them ignoring their own rule books - as they doled out up to 100% property loans and personal credit without adequate security, accepting personal guarantees that proved worthless afterwards in so many cases. The governments concerned maintained generous tax incentives for far too long, driving property prices through the roof and inflating the property bubble to bursting point.

As Taoiseach Ends Kenny described it last week in Davos, this created 'a system that spawned greed to a point where it went out of control completely with a spectacular crash.' For Neil Collins to opine that the Taoiseach, when speaking abroad, tends to 'avoid putting the blame where it belongs' - on the European banks - is disingenuous in the extreme, given the role of the former's party in the economic debacle.

He should cease to be in denial about the true facts and desist from his distorted revisionism of this shameful chapter of our recent history. As a nation, we should not be in denial either about the facts of the matter, as a lot of our economic problems were self-inflicted and people who took advantage of cheap credit to create the illusion of personal wealth must admit that they were somewhat naïve to allow themselves to be so easily led - and it was not just by the government and the banks, the media also has to own up to its part in glorifying the materialism that overtook the country.

Clearly, what the Taoiseach was trying to do in Davos was to highlight the huge efforts and sacrifices being made by the Irish people to try to right our economic wrongs with a view to boosting foreign direct investment here and perhaps even securing some more 'Brownie points' for us in the quest to have the strict conditions of our bail-out deal eased a bit. But, he needs to be more keenly aware of raw sensitivities that may be aroused on the home front towards any off-the-cuff remarks he makes on the international stage in future.

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