Alan Dukes warned of possible bailout 30 years early

Ireland came close to being forced into a bailout more than a quarter of a century before it actually happened, according to Government papers released today by the National Archives under the 30-year-rule.

Back in 1984, the then minister for finance, Alan Dukes, warned his cabinet colleagues that the financing of public expenditure for the remainder of that year could not be assured.

"If the government are forced to approach the European Community or the IMF for assistance, this will be given only on condition which will impose on the economy from without decisions far harsher than those now contemplated," said his memo in a Department of the Taoiseach file.

Mr Dukes drafted the memo to persuade cabinet colleagues to implement spending cuts.

"The international banks keep our position under constant review; they visit the Department of Finance regularly and question officials closely on the developing budgetary situation," it said.

Ironically, in 2008 Mr Dukes was appointed by the then minister for finance Brian Lenihan as public interest director of Anglo Irish Bank when the scale of its debts threatened the entire banking system.

Chair of Anglo

The debts at Anglo were one of the main reasons for the EU-IMF bailout of 2010. At that stage Mr Dukes was the chair of Anglo and he remained in that position until its successor was liquidated by the Government in 2013.

Back in 1984, Mr Dukes pointed out that Irish national debt was growing to unsustainable levels.

At that stage Ireland topped an international table of countries with high foreign debt as a percentage of gross national product ahead of Argentina, Venezuela, Chile and Brazil. The figure for Ireland was 53 per cent, while the UK figure was 4 per cent. Unemployment was at 16 per cent.

In the memo, dated September 5th, 1984 and stamped “secret”, ministers were warned of the “serious problems facing them” in reaching the target set for borrowing from domestic sources to finance the 1984 exchequer borrowing requirement.