Updated 7.35pm
BRIAN COWEN MADE the first of two long-awaited appearances before the banking inquiry today to discuss his role as Minister for Finance between 2004 and 2008.
The former taoiseach was bullish throughout and provided a robust defence of his record in office and the policies pursued by the Fianna Fáil government.
Cowen spent several hours answering questions from TDs and Senators in Committee Room 1 of Leinster House and here’s what we learned…
1. He’s sorry
Like many before him – but unlike Charlie McCreevy yesterday – Cowen began his evidence with an apology, saying he was sorry for the hardship caused by the economic downturn and the role he played in it.
I accept full and complete responsibility for our role in, and response to, that crisis.
Towards the end of his evidence he apologised again, and added:
Our motive and purpose at all times was to see an ambitious improvement for people and when something like this hits you have to change course… I did my duty as best I could.
2. But he did a good job
When asked directly if he thought he was successful in his role as Minister for Finance, Cowen’s answer was ultimately a Yes. He said that, in hindsight, he would have made some decisions differently, but defended the spending increases he introduced.
He said he had enough experience to take on the role, given his experience in other departments, but admitted:
I’m not a qualified accountant, which probably is helpful.
Cowen noted that the Fianna Fáil-led government he was part of recorded budget surpluses in ten of eleven budgets up to the time he left office as finance minister.
He said it is unfair for people to now denounce spending increases, as others would have done the same given the money that was available.
I stand over my decisions. How long would we wait to give an old age pensioner a few more bob?
In hindsight, there are lessons to be learned … We are all very wise in hindsight. We all seem to have 20/20 vision.
3. A rock and a hard place
Cowen said the government was left “in no doubt” that burning bondholders would have meant no funding from the Troika, stating: “It was one or the other” and “we were on our own.”
In terms of the bank guarantee, which will be explored at length next week, he said it was a case of taking the least worst option available. Cowen said a wrong move could have set Ireland back 25 years.
4. The Galway Races Tent wasn’t a big deal
When Socialist TD Joe Higgins raised the issue of Fianna Fáil’s infamous hospitality tent at the Galway Races, Cowen said some people viewed the tent as a cover for “collusion”, but this wasn’t the case.
There was no big deal … You couldn’t pick a winner in the Galway Races tent, never mind anything else.
Cowen was combative, telling Higgins:
You’re setting me up as some sort of guy who is promoting cowboy speculators … I’m not. I don’t travel in those circles.
Not everyone agreed with this summation, however:
5. But what about dinner at Anglo?
In the afternoon session, Cowen was asked about attending a private dinner at Anglo Irish Bank’s HQ on 24 April 2008. Cowen said the dinner was informal and came about as a result of his impending departure from the Department of Finance (to become Taoiseach).
He said it was the one and only time he would have met then-Anglo CEO David Drumm and said then-Anglo chair Seán Fitzpatrick – who he had met three or four times previously – was also there.
Cowen said he took no notes or documents and said that the pressures facing the bank were not discussed at the informal dinner, even in the wake of the sharp drop in its share price in the weeks before that. There was no discussion about a possible guarantee for the bank.
Sinn Féin’s Pearse Doherty asked would this not have been a unique opportunity to seek information on the bank. But Cowen said that while one Anglo executive – whose name he couldn’t recall – made general remarks about Anglo it was otherwise all very informal.
It was a very much a social occasion. It wasn’t a business meeting and if it was a business meeting it would have been held in the Department of Finance.
6. Morgan Kelly got it right
Cowen admitted that UCD professor Morgan Kelly’s predictions about the property market were correct. Here’s what he had to say about the 2007 report that was essentially ignored at the time:
In an interview on publication of the review, ESRI economist, Dr Alan Barrett made it clear that the ESRI did not share Professor Kelly’s prognosis that house prices in Ireland over the following 8 years could drop between 40% and 60% in value.
“Whilst the ESRI thought that house prices were overvalued by 15%-20%, it did not believe there was going to be a sharp fall in house prices. It was forecasting a house price decrease of 3% for 2007 with it stabilising the following year.
He said that the think tank’s economic growth forecasts for 2007 and 2008 were consistent with stability in the housing market. But Cowen admitted they were wrong and Kelly was, in fact, on the money.
He later said he could not recall a specific document outlining the infamous ‘soft landing’ assessment of the economy. During the evening session, Cowen spoke at length about contrarian views and said there need to be more of a culture of them being encouraged the public service. He later said:
I regret that I wasn’t more doubting.
7. He doesn’t like being interrupted
One of the most robust exchanges of the day came when Cowen shut down lead questioner Kieran O’Donnell, repeatedly telling the Fine Gael TD: “Let me finish”.
At one point, when asked if he felt sympathy for those who suffered in the crash, Cowen pointedly told him
You have no monopoly on upset deputy, or those in distress.
It didn’t end there. At one stage he told O’Donnell: “Let me answer the question – it took you five minutes to ask it.”
It was indicative of the sort of bullishness Cowen was famous for in the Dáil when he was coming under pressure at Leaders’ Questions. Towards the end of the day-long session he was clearly flagging from the intense questioning.
8. His friends are “mundane”
Cowen denied being close friends with property developers and bankers, saying: “My acquaintances and close friends are quite mundane, not well-known.”
In response, Labour Senator Susan O’Keeffe asked him about the “frequent” visits of entrepreneur Fintan Drury to his office while in government. He said they have been friends for nearly 20 years and didn’t discuss banking during those conversations.
9. He likes to gesticulate
A lot.
Cowen is due back before the committee next Wednesday to give evidence in relation to his time as Taoiseach from 2008 to 2011.
- with reporting from Hugh O’Connell
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