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Former Irish Prime Minister Brian Cowen

Former British finance minister says Irish govt panicked over banking crisis

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Former Irish Prime Minister Brian Cowen

A former British Chancellor has claimed Ireland’s decision to bail out the banks in 2008 smacked of panic.

Labor Party Minister Alistair Darling has claimed in his memoirs that Brian Lenihan and his FIanna Fail led government panicked when faced with the bank crisis.

The decision to guarantee savings in Irish banks led, many feel, to the collapse of the banking system and burdened the tax payer with the huge debt that forced the EU-IMF bail-out.

Darling, a close ally of Lenihan in European circles, only heard the news on the BBC, four hours after the decision was made by Lenihan and his cabinet colleagues.

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The then British Chancellor told Lenihan by phone that he feared savers in British banks would shift their money to UK branches of Irish banks.

He also told the late Finance Minister that the British had been put in an impossible position and would take action if it became clear funds were flowing from British to Irish banks.

“The guarantee smacked of panic rather than a plan and I had been aware of disagreements between Brian Cowen and Brian Lenihan,” writes Darling.

“I had a good working relationship with Brian Lenihan who worked tirelessly for his country after being diagnosed with cancer.”

Alistair Darling served as Chancellor under Gordon Brown until Labor lost power last year.

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