Brian Lenihan, who served as Ireland’s finance minister during the most turbulent period in the country’s economic history, has died. He was 52.
Lenihan died at home in the early hours of this morning, his family said in a statement released by his Fianna Fail party in Dublin today. He was suffering from pancreatic cancer, which had been diagnosed in late 2009.
A lawyer by training, Lenihan took over as finance minister in May 2008 as the economy moved toward the worst recession in its modern history. Four months later, he introduced a guarantee of the deposits and most of the debts of Ireland’s banks, a decision that tied the state’s fate to that of the debt-laden financial system. Last year, Lenihan was forced to seek an international bailout, presiding over a loss of economic sovereignty after almost 90 years of independence.
“He was an excellent communicator who was eventually overwhelmed by circumstances,” Alan McQuaid, chief economist at Bloxham Stockbrokers in Dublin, said in an interview before news of Lenihan’s death was announced. “In the end, he was let down by a lack of expertise and maybe some bad advice.”
A month after his appointment as finance minister in 2008, Lenihan said he had the “misfortune” to take the job as the economy slumped. The budget deficit soared to about 32 percent of gross domestic product last year, including bank-bailout costs, as a real-estate bubble burst and tax revenue plunged.
In the aftermath of Lehman Brothers Holdings Inc.’s collapse, Irish banks came close to collapse as credit dried up. Lenihan responded by guaranteeing about 440 billion euros ($637 billion) of Irish bank deposits and borrowings, a move he said helped avert a financial “nuclear winter.”
The state has so far pledged 70 billion euros to the banks, a commitment that became too big for Ireland to handle alone. With investors shunning Irish sovereign and banking debt, Lenihan was forced to seek a bailout in November 2010.
“I have a very vivid memory of going to Brussels on the final Monday and being on my own at the airport and looking at the snow gradually thawing and thinking to myself: this is terrible,” Lenihan said in a BBC radio interview earlier this year. “No Irish minister has ever had to do this before. Now hell was at the gates.”
A scion of an Irish political dynasty, his father Brian, who died in 1995, was a deputy prime minister and a one-time presidential candidate. As a schoolboy, Lenihan attended Belvedere, James Joyce’s alma mater, and then studied law at Trinity College Dublin and Cambridge University.
Lenihan was appointed to the finance post by former Prime Minister Brian Cowen, 12 years after he first won his seat in parliament. Before that, he served as justice minister from June 2007 to May 2008 and was a junior minister at the health, justice and education ministries.
Lenihan “acted patriotically to stabilize the state’s finances in the face of unprecedented pressures,” Irish Central Bank Governor Patrick Honohan said today in an e-mailed statement. He was a “decent man, a fine public representative,” said Prime Minister Enda Kenny.
Cowen resigned as leader of the Fianna Fail party in January, and Lenihan was defeated by Micheal Martin in the contest to succeed him.
“He was an extraordinary individual with a powerful intellect and a gifted communicator,” Martin said in a phone interview. “His greatest contribution was the manner in which he was decisive in the budgetary and banking decisions, regardless of the political consequences or any personal considerations.”
Lenihan held his seat in the general election in February as his party was swept out of power for the first time since 1997. Martin named him as finance spokesman even as he continued to battle cancer.
“He always worked for his country and the best for Ireland,” Lenihan’s aunt, Mary O’Rourke, a former lawmaker, said in an interview on RTE Radio today.
Lenihan is survived by his wife, Patricia, a son and a daughter.