Former Irish prime minister Brian Cowen will today be quizzed by lawmakers on his handling of the economy in the run-up to the real estate crash which devastated the nation.
Cowen will appear in Dublin on Thursday before an inquiry into the collapse of the nation’s banking system, which forced the country to seek an international rescue. Today, Cowen is scheduled to be questioned about his tenure as finance minister between 2004 and 2008, with a session next week focusing on his time as prime minister.
While the nation’s top bankers and civil servants have already faced the inquiry, Cowen is the most senior politician from that era to appear. He has rarely sought to explain his decisions since leaving office in 2011, even as the country tumbled into recession and endured years of austerity budgets.
“It’s going to be an extraordinary moment,” said Brian Lucey, a finance professor with Trinity College in Dublin. “It’s the highest of high stakes. He’s playing for his reputation in history, which isn’t good at the moment.”
Cowen and his then-Finance Minister Brian Lenihan decided in September 2008 that Ireland would guarantee about 440 billion euros of debts owed by six of the nation’s lenders. The call cost taxpayers a gross 64 billion euros ($71 billion) in rescue funds as bad loans soared.
Lenihan died from pancreatic cancer in 2011, leaving Cowen as the only Irish politician who can “shed light” on the decision to guarantee the banks’ debts, Lucey said. The International Monetary Fund described the crash as the costliest bank rescue in an advanced economy since the Great Depression.
“He’s absolutely vital,” Lucey said. “Democracy will be well served by Brian Cowen coming out and being as clear and coherent as we know he can be.”