THE head of Europe’s bailout fund has said the economic crisis in Ireland could have collapsed the euro.
Banking inquiry: Ireland was a country where no one was in charge – Klaus Regling
Klaus Regling, who is managing director of the European Stability Mechanism (ESM), told the Oireachtas Banking Inquiry Ireland’s economic collapse could have brought down the European Union’s currency.
Mr Regling was speaking to the inquiry about the report he prepared for the Government in the wake of the banking crisis.
Fianna Fail Senator Marc MacSharry asked Mr Regling if the collapse of the Irish banking system could have collapsed the euro.
Mr Regling replied: “yes”.
When pushed for more details by Fine Gael senator Kieran O’Donnell, Mr Regling said there were fears of a “contagion” effect from the Irish crisis.
He said international investors would not differentiate between Ireland’s economic problems and the rest of Europe.
He also said the EU’s bailout programme would not have been initiated if there was not a wider threat to the rest of the member states.
Mr MacSharry asked Mr Regling if the ECB and other EU authorities should be more open to taking part in the inquiry.
Committee Chairman Ciaran Lynch told Mr Regling he did not have to answer the question as it did not relate to his report.
Mr Regling said: “until the period up to 2008 I don’t see what they (ECB) can contribute.”
He was also highly critical of banking regulations in Ireland before the crash and said the relationship between banks and supervisors was “not healthy”.
He said property was a “national obsession” in Ireland.
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