The European commission has been accused by Klaus Regling, the boss of the EU's new bailout fund - the European Financial Stabilisation Fund (EFSF), which was set up in mid-2010 to provide funds to bail out euro-member states- of not doing enough to criticise the unsustainable growth of the Irish economy during the boom. Ireland was the first country to be provided with funds by the EFSF.
During the boom he said that there had been “a lack of budgetary discipline” in Ireland and the European Commission, failed to criticise this sufficiently. Mr Regling was the head of the European Commission’s directorate general for economic affairs from 2001-08.
At the time, the commission considered the very large increases in expenditure to be an excessive stimulus to the economy. These increases were introduced by the then Minister for Finance Charlie McCreevy and implemented in order to ‘buy’ the 2002 general election. Facing resistance from the Irish government of the time and with a lack of support from other EU member states, the commission backed down and Mr Regling halted a censure motion from the Commission. He now says that; “we failed”.
Mr Regling has co-authored one of two reports on the Irish banking crisis.