Belfast Telegraph

Kenny: Mad borrowing sparked crisis

Ireland's economic crisis was caused by people's mad borrowing, Taoiseach Enda Kenny has told the Davos global gathering in Switzerland.

In a discussion on ways out of the country's worst recession on record, Mr Kenny told the summit in the Swiss Alps that easy credit spawned greed.

He said: "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 and banks - a system that spawned greed to a point where it just went out of control completely with a spectacular crash.

"The country borrowed over 60 billion euro at excessive rates and the IMF eventually came in with the Troika."

Opposition parties said the comments, made at the World Economic Forum, are at odds with the Taoiseach's assessment in a pre-budget address to the nation last December when he said: "Let me say this to you all: You are not responsible for the crisis."

Sinn Fein TD Padraig Mac Lochlainn said it was an "outrageous analysis" and accused the Taoiseach of blaming Irish people for a crash caused by aggressive lenders and greedy banks.

Mr Mac Lochlainn said: "He gave an address to the Irish nation in December, telling us it was not our fault, but to say this was an absolute contradiction. This analysis that people in Ireland went drunk with credit, were reckless and they have to now be cleansed by a decade of austerity to clean them of their sins is very worrying.

"People were aggressively cajoled, every time you opened your newspaper or put on your TV. What you had was aggressive lending by the core banks that toyed with low interest rates. It was like crack cocaine."

A spokesperson for the United Left Alliance (ULA) said: "Ordinary householders borrowed because of the excessive price of houses. The ULA puts the blame squarely at the foot of developers, bankers and speculators who conspired to create massive and, for them, highly profiteering, and there was a bubble in the market."

Mr Kenny was taking part in a plenary session with European Commission president Jose Manuel Barroso, Finnish prime minister Jyrki Katainen and Polish president Bronislaw Komorowski.


From Belfast Telegraph