Taoiseach Brian Cowen has again rejected Opposition criticism of his management of the economy, claiming no agency or political party had warned about capital reserves in Irish banks in the years preceeding the property crash.
In a speech last night, Mr Cowen conceded a number of internal factors, including mistakes by government, had exacerbated the economic and financial crisis. Nevertheless, he insisted there would have been a "soft landing" for the Irish economy if the unprecedented global financial collapse had not occurred.
Fine Gael leader Enda Kenny told a party front bench meeting in Cork today that the Taoiseach, in defending his own personal handling of events, was refusing to acknowledge that he drove the economy “up on the rocks” for four years when he was in minister for finance.
“He expects everybody else to accept responsibility for it but not him,” he said. “It’s another example of hands being washed by those in charge, a refusal to accept responsibility for their part in destroying the Irish economy and heaping economic woes and depression upon so many people.”
Mr Kenny said the Taoiseach should now call a general election.
Labour Party leader Eamon Gilmore today accused the Taoiseach of "engaging in self-justification".
"I am not looking for a big mea culpa, but I think it would help if there was an honest acknowledgment by him, that he as minister for finance he holds responsibility and some of the responsibility for it," Mr Gilmore said.
The public was more concerned with hearing about "how we are going to get out of the difficulty that we're in," he said.
Fine Gael finance spokesman Richard Bruton said Mr Cowen's speech read "like a sad attempt" to pre-empt the findings of the banking inquiry. "The Taoiseach is fooling nobody if he thinks that catastrophic mistakes were not made during his time as minister for finance," he said.
Responding to the criticism this afternoon, Mr Cowen said he had taken responsibility for his actions as minister for finance, saying countries that failed to take tough decisions placed their economic sovereignty at stake. However, he insisted no one foresaw the scale and impact of the financial crisis.
"My basic point in relation to the banking crisis is that nobody, nobody, independent authorities, national or international or indeed in the political system, were suggesting that we didn't have sufficient capital in our banks."
Mr Cowen denied the Government failed to act on the findings in a series of three reports into the rapidly growing property sector carried out by economist Peter Bacon in the late 1990s.
"We had property tax incentives which in the late 1980s and 1990s were needed to prime pump some activity in this country." The incentives had led to a huge increase in capital development, and facilitated the building of schools, hospitals and the almost completed motorway network.
He also dismissed the suggestion that the property sector was allowed to become too large relative to the rest of the economy when it reached 25 per cent of GDP at one stage.
Mr Cowen said property incentives had served their purpose and he dismantled them a little over a year after becoming minister for finance.
"Those issues under my direct control, I dealt with them in my capacity as minister for finance."
The Taoiseach also denied the government had been profligate in its spending during the boom. He said two-thirds of the additional revenues were used to bring the national debt down to 25 per cent. "We had surpluses in our budgets".
These revenues were also used for capital invesments, to hire nurses and gardaí and the economy became competitive as a result of full employment.
He did not answer directly a question posed on RTÉ's News at One about the impact of offering benchmarking pay increases to public sector staff during a time of almost full employment. He also failed to answer a question about whether he should have met more regularly with the financial regulator as minister for finance.
Mr Cowen said the Government was taking steps to ensure the banks provided adequate lending to businesses.
"We have got to get banks to lend." He said the taxpayer had provided a helping hand to allow the Irish banks to survive and in return the Government wanted to know where the €3 billion provided to Aliied Irish Bank and Bank of Ireland was going to be provided.
"They have got now to make a contribution to this country as well because the taxpayer has made a huge contribution."