The Bust

Testicles indeed. The view may have been expressed in a typically, er, unorthodox Ahern-ian fashion, but it’s clear that Lehmans had made a complete balls of it. And perhaps Bush had too... Either way, Ireland was never going to emerge unscathed from America’s economic hammering. However, it was worse than anyone had predicted. It gradually emerged that the government and the relevant regulatory agencies had resoundingly failed to effectively monitor the activities of Irish banks during the boom. As the colossal scale of the indebtedness of Irish banks became clear the writing was on the wall. Without Government intervention, they would all go bust, one after the other. And Anglo Irish bank had been particularly reckless, with the excesses there gradually making the issues covered by the Tribunals seem like paltry affairs.
The reversal in fortunes experienced by the developers – whose social status during the boom years was practically on a par with rock stars – was genuinely incredible. Carlow native Sean Dunne shelled out an eye-watering half a billion for property in Ballsbridge, only to find himself telling the New York Times in January ’09 that, “if the banking crisis continues I could be considered insolvent.” He was far from the only one, however, with many other developers also living in fear of the dreaded “I” word.
As banks came under closer scrutiny, credit dried up. The wheels of commerce slowed down catastrophically. Tax revenues plummeted. People had been dreaming of a soft landing from the boom years: instead we were into plane crash territory, with bodies everywhere littering the runway. Some of them, we had to assume were just trying to escape. It was no surprise when the carnage spilled over into people’s personal lives. A number of high profile suicides were put down to financial collapse. Those trying to stay in business soldiered on.
And what was the government’s response to all this? Well, Minister for Finance Brian Lenihan generated acres of press coverage by announcing plans to set up an entity called the National Asset Management Agency (NAMA), with the intent of ring-fencing the banks’ toxic debt. Fair enough, you might think. Only Minister Lenihan – in a blatant bid to keep the banks’ bondholders onside – announced the government’s intention to pay what most independent commentators agreed would be way over the market value for certain assets.
The move provoked huge controversy, and still does as the decade draws to a fiercely uncomfortable close, calls for outright nationalisation of the banks having been ignored.
Happily, however, the country’s top legal eagles are likely to make a fortune once NAMA gets up and running. Elsewhere, as the noughties ended, dear old Éire was in a state – with the emphasis on the lower case “s”. Public sector unrest over proposed pay cuts (even the gardai were threatening strike action, despite it being an illegal act) and rising unemployment combined to give the Taoiseach, Brian Cowen, and his cabinet a monumental headache.
As Tommy Lee Jones says in the movie of Cormac McCarthy’s superb novel No Country For Old Men, “If it ain’t a mess, it’ll sure do ’til the mess gets here.”