No banker, politician, regulator or auditor has “been found guilty of any crime related to one of the worst financial crises in history, which led to a humiliating €67.5bn bailout in 2010”.
Blaming a narrow group of bankers and developers suits a Dublin government seeking aid from its European partners to recapitalise its bust lenders. But it underplays the depth of the fiscal crisis in which, regardless of the banking crisis, Ireland found itself.
…Under the “clientelistic” approach, encouraged by the political system, everyone was paid off. Tax breaks were handed out to political supporters in the property sector in 2002, when the overheated market began cooling. Personal income tax cuts were introduced even as public spending rocketed.
…A secretive “benchmarking process” was set up that awarded public servants an average 32 per cent pay rise between 2003 and 2008, with only lip service paid to reforms.
The 2007 election campaign became an “auction of spending promises” by the main parties. Individuals who spoke out were silenced or, in the case of one Department of Finance official detailed in the book, were told by senior colleagues to “cease and desist”.
Between 2008 and 2015, three-quarters of the increase in Ireland’s net debt will be accounted for by the budget deficit, as opposed to recapitalisation of its banks. In other words, the bailout may have been required even if the banks had not run aground.
A review by Jamie Smyth, Irish FT correspondent, of The Fall Of The Celtic Tiger by Donal Donovan and Antoin Murphy.
Ireland’s woes are more than a bank crisis (Jamie Smyth, Financial Times)