Ireland was pushed into €67.5 billion bailout, says Kevin Cardiff

Ireland had been “pushed” into its €67.5 billion EU-IMF bailout programme at the end of 2010, the Oireachtas banking inquiry was told yesterday.

During almost five hours of evidence to the committee, Kevin Cardiff, a former secretary general of the Department of Finance, said Ireland was “pushed quite hard” and the process involved a number of leaks to the media.

“The push we got . . . in some ways was direct,” he said. “We knew who was doing it; we knew what they were saying.

“In other cases though, the pressure came indirectly via some misinformation, via anonymous media briefings reportedly coming from official sources, which acted to accelerate market pressures and create enormous pressure on Ireland to enter an EU-IMF programme quickly.”

He said the advice from the European Central Bank on our entry to a troika programme was “specific”.

“It was directly tied to conditions they had outlined in correspondence and there were consequences for non-compliance,” he said.

“The ECB had its reasons and I don’t say that they were wrong from their perspective, certainly, but their view was clearly an important pressure point.”

Mr Cardiff said that for various reasons it was “quite unlikely” that Ireland could have financed itself in 2011 in sovereign debt markets.

“We were unlikely to be able to borrow or might only be able to do so at such high interest rates as to make our debt become unsustainable,” he said.

He was “grateful” the EU and IMF were willing to provide Ireland with funding for three years.

Mr Cardiff praised the professional way in which the EU and IMF negotiators dealt with Ireland but said it was “clearly inappropriate” that “back door” briefings with media took place at points when negotiators were “trying to make decisions”.

He said this added to the pressure on the Government. “Democratic systems should not rely on undermining reputations and distributing misinformation via anonymous briefings.” Sinn Féin TD Pearse Doherty asked Mr Cardiff if it was true that then minister for finance Brian Lenihan was concerned that a member of cabinet was leaking information.

“I never had . . . any inclination . . . indication . . . of who he suspected or if it was a particular person he suspected, or just the process,” he said.

“I don’t think there was any malicious intent anywhere, I think the minister was just trying to be careful about what he said in places where it might, it might spread.”