DUBLIN- Ireland’s deputy prime minister on Tuesday laid in to “arrogant” executives at a failed bank who mocked government efforts to tackle an economic crisis, amid growing public outrage at the latest revelations in tapes of bank executive phone calls.The revelations were seen as potentially damaging to Ireland’s efforts to obtain concessions from the European Union on the terms of a bank rescue that pushed it to an 85-billion-euro ($111 billion) bailout.
In the tapes published by the Irish Independent newspaper, the collapsed Anglo Irish Bank’s then-head of capital markets John Bowe was asked how it had come up with a figure of 7 billion euros for a rescue, responding that he had “picked it out of my arse.”
The bank eventually cost taxpayers some 30 billion euros during the financial crisis, almost one-fifth of the country’s annual output, and three former executives—not including Bowe—will go on trial next year on fraud charges.
“I mean the degree of arrogance, the degree of hubris, the degree of couldn’t-care-less-about-the-taxpayer, about the Irish people, that seemed to be part and parcel of the culture of that bank,” deputy prime minister Eamon Gilmore said.
In Dublin, the story dominated television and radio news for a second day, with almost all national papers splashing the story on their front pages. “How come nobody’s in jail?” read the lead headline in the Irish Sun.
The Irish Independent released more details including Bowe singing the German national anthem and laughing as he discussed the prospect of German money flowing in after the guarantee on deposits.
“There is a lot of latent anger about this issue,” said Eoin O’Malley, a lecturer in politics at Dublin City University. “Most of us must have known—but now you can hear them commenting and you can hear the tone.”
Many Irish have had their salaries cut by 20 per cent or more in order to meet fiscal deficit targets as part of the loan guarantees for the country’s international bailout.
The unemployment rate has trebled since the crisis to 14 per cent after the bank-and-land speculation property bubble burst. The 2008 blanket guarantee on bank liabilities led to an 85 billion euro IMF/EU bailout and provoked widespread anger in the country of 4.6 million.
“These guys in the banks lose billions and nothing ever happens,” said Noel Newman, a 78-year-old retiree in Dublin. “On the tape they were laughing, joking. The way they said it was disgusting. Unbelievable.”
Bowe and another executive, consumer banking chief Peter Fitzgerald, said they regretted the conversation but denied any wrongdoing or intention to mislead the central bank.
The opposition has called for a full inquiry into the collapse of the financial system and the timing has embarrassed the government in the last week of its six-month EU presidency.
Ireland wants funds from the European Stability Mechanism bailout fund to help reduce its debt burden from bailing out its banks, but any application will be decided on a case-by-case basis and could be complicated by questions over the bailout.
“We’ve had continuing negotiations with the ECB (European Central Bank) and with European Union partners. What has come out of these tapes doesn’t make our job any easier—it makes it more difficult,” Gilmore said at a meeting in Luxembourg.
The bloc’s finance ministers agreed last week that the ESM will be able to help recapitalize banks that ran into trouble in the past—which Ireland views as vital to shore up its finances—but it will not give blanket permission for the funding.
Anglo, which was liquidated earlier this year, brought a premature end to the political career of former Prime Minister Brian Cowen, who was finance minister during the years of reckless lending across Irish banks.
“What the people want to know is when justice is going to be done,” Cowen’s successor Enda Kenny, leader of the opposition in 2008, told parliament. Kenny has promised an inquiry once required legislation is passed, which he hopes to do by August.
But many voters remain skeptical that a close-knit elite would do what it takes to bring friends of friends to justice.
Original Article
Source: thestar.com
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