Ministers back Kenny's 'people went mad borrowing' remarks

 

GOVERNMENT MINISTERS have come out in support of Taoiseach Enda Kenny in the face of trenchant Opposition criticism over his comments at Davos that people “went mad borrowing” in the boom.

But while some Ministers insisted there was truth in the Taoiseach’s comments, others insisted the affair has been blown out of proportion.

Speaking during a discussion at the World Economic Forum in Davos on Thursday, Mr Kenny said the problem with Ireland’s economy was that “people went mad borrowing” in a system that spawned greed and went out of control and crashed.

Yesterday, Fianna Fáil TD John McGuinness said Mr Kenny’s credibility had been damaged. “When you are delivering a message like that, whether it is in Dublin or Davos, if you are sincere about the message it will be the same,” he said. “I think the message being delivered by the Taoiseach in terms of what he said in Davos yesterday has damaged his credibility and his message. You can’t deliver two different messages to the same audience.”

Fr Seán Healy of Social Justice Ireland said the Taoiseach’s remarks were “amazing and extraordinarily lopsided”.

He said Mr Kenny failed to recognise that the generous bank guarantee and subsequent socialising of the debt lay at the root of Ireland’s problems.

However, Minister for the Environment Phil Hogan advised people analysing Mr Kenny’s comments to “get a grip of themselves” as they had been blown out of all proportion.

He said Mr Kenny had made it clear that the policies of Fianna Fáil and reckless lending by financial institutions contributed to the madness of developers and people getting caught up in it, causing huge difficulties for ordinary people around the country.

Minister for Health James Reilly said there was “absolutely no doubt” that people were encouraged by reckless lenders and banks to borrow and encouraged further by the government of the day. “People had money shoved at them, we know that . . . the type of lending that went on at that time was clearly reckless and has clearly led us to where we are now.”

Minister for Transport Leo Varadkar said the moral flaw at the heart of the crisis was greed. “Some people were greedy, but everyone was not,” he said. “A lot of people just got by on what they had, bought the house they could afford to buy. But at the same time there were other people who borrowed too much, who spent too much and who made foolish investments and we are all paying for the price of that.”

Minister for Enterprise Richard Bruton said the Taoiseach had outlined where exactly the blame for the crisis lay.

Minister of State for Europe Lucinda Creighton said Mr Kenny’s empathy for people suffering as a result of the financial crash was well known. “I think that his comments, in fairness, were blown out of all proportion and were taken out of context,” she said, speaking in Brussels. She continued: “I think, rather than trying to engage in blame games about who’s to blame I think we have to start looking at how we as a nation can just pull together to try to find solutions to the current crisis.”

Minister of State Alan Kelly said the Taoiseach meant “a small amount of people” with large borrowings when he referred to Irish people going mad in the boom. He described the controversy as “a storm in the teacup”.

Businessman Denis O’Brien also defended the remarks and said Mr Kenny’s presence in Davos was of greater significance by creating a “buzz about Ireland”.

Davos interview what the Taoiseach said

“BUT WHAT happened in our country was that people simply went mad borrowing. The extent of personal credit, personal wealth created on credit was done between people, banks, a system that spawned greed to a point where this went out of control completely with the spectacular crash that you mention. The country borrowed over €60 billion at excessive rates and the IMF eventually came in with the troika.

So what’s happened in the meantime? Well last year in a general election people gave a very clear mandate to the Government I lead . . . That meant explaining to people the reality of the scale of the challenge – the truth of where Ireland actually stood. It’s got to be understood that people are very pragmatic and that the political process and politicians should never underestimate people’s capacity to want to assist government in helping out problems like this . . . Now we have had five different assessments by troika from the ECB, the commission and the IMF.

In each of those assessments there has been a deeply intensive analysis of Ireland’s performance . . . I am glad to say our people understand the scale of that challenge and we have measured up in each and every one of those conditions.

That has meant reduction in public salaries, a reduction in cost of public sector and the size of the public sector increases in pension age. As a consequence . . . people have refocused on their values and what it is they want to increase to the wellbeing of the country.”