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Revealed: The Department of Finance's secret 'Johnny Logan working group'

A former senior finance official has revealed secret plans were made in case Ireland defaulted from the euro.

Updated: 4.25pm

THE DEPARTMENT OF Finance had a small group of people working on a contingency plan for Ireland exiting the euro.

Kevin Cardiff, former Secretary General at the Department of Finance, told the banking inquiry he had denied the existence of such work in the past.

“This was dynamite stuff … The notion that you would sit down in a committee and declare that was just ridiculous.”

kevin 24 june

Cardiff said “a very small group of people” drafted a number of contingency papers in case we were “unceremoniously shown the door or if that was the only option”, adding it was never preferable to default.

He noted that Ireland wasn’t the only country working on a secret default plan, recalling an official from “another jurisdiction” asking him: “Could you have who’s not working on it in your office telephone who’s not working on it in my office?”

In another revelation, Cardiff said he made “discreet inquiries” on how a country goes about entering an International Monetary Fund (IMF) bailout programme in 2008, two years before we had to do this.

Again, he said this was a contingency plan and he wasn’t fully convinced Ireland would need to follow through.

Cardiff said the IMF told the government such a programme would be available if necessary, but then Finance Minister Brian Lenihan said we would not engage with this suggestion.

Later in the meeting, Cardiff joked about the existence of a “Johnny Logan working group” – tasked with finding an extra year’s worth of national funding.

All together now:

JBJandJLfan / YouTube

Burning bondholders 

On the issue of burning bondholders, Cardiff reiterated comments he made to the inquiry last week – where he said then IMF chief Dominique Strauss-Kahn was in favour of burning senior bondholders and thought he could “persuade” other major players to agree.

He was wrong and received “a very negative reaction”, from people including Timothy Geithner, then Secretary of the Treasury in the US, and the European Central Bank’s then chief Jean-Claude Trichet.

Cardiff said Lenihan had “one very optimistic day” where he thought bondholders could be burned.

marc 24 june

When Fianna Fáil Senator Marc MacSharry asked if the content of speeches or public comments written by the Department of Finance for Lenihan was ever affected due to “raw vote getting”, Cardiff said: “That’s how democracy works, I’m afraid.”

Cardiff, who worked at the department from 1984-2012, noted that “no one paid as much as [Ireland]” when helping to save the euro.

Greece’s ‘shite problem’

Cardiff said the current Greek crisis is “quite a bit deeper even than ours”, adding: “Our heart goes out to them.”

However, he refused to be drawn on whether or not he would have negotiated differently with the Troika “with the benefit of hindsight”.

Cardiff said he didn’t wish to elaborate on the situation in Greece as his appearance before the committee last week was reported in the country’s financial papers.

They’re in the middle of a really shite problem so let’s leave them alone.

Seemingly a little surprised by the use of the word ‘shite’, MacSharry said “okay” and moved on.

Read: ‘People want the drama of overpaid bankers and reckless developers, but it’s not that simple’

Read: Those banking inquiry leaks to the media have been referred to gardaí

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37 Comments
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    Mute Pat Daly
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    Jul 2nd 2018, 7:42 AM

    Typical of the attitude of the Munster branch towards the club’s choosing to dictate rather then support when it comes to spending money gained on the back of the grass roots

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    Mute Cormac Ó Braonáin
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    Jul 2nd 2018, 6:07 PM

    @Pat Daly: in fairness Dolphin’s reasoning was pretty weak? Privacy? FFS

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    Mute Martin Sinnott
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    Jul 2nd 2018, 7:43 AM

    A few more pictures needed

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    Mute prop joe
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    Jul 2nd 2018, 9:49 AM

    @Martin Sinnott: i’ll be honest the way it is now is fine. Building a massive concrete wall would look terrible never mind be very expensive.

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    Mute prop joe
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    Jul 2nd 2018, 5:57 PM

    @Martin Sinnott: basically its a security fence and you can see onto the pitches. I don’t see a problem with this fence. A concrete wall would look terrible.

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    Mute Trevor Donoghue
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    Jul 2nd 2018, 2:46 PM

    So the club sold the land to Mc donalds to build a mc donalds on and now the club is annoyed that mc donalds built a mcdonalds?

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    Mute Rossi Rossborough
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    Jul 2nd 2018, 3:51 PM

    @Trevor Donoghue:

    Lol, pretty much!

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    Mute Michael Kavanagh
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    Jul 2nd 2018, 6:53 AM

    Sounds like a ‘line break’ to me!

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    Mute eastsmer
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    Jul 2nd 2018, 11:56 AM

    Munster Rugby was also the entity which sold the McDonald’s site to the fast food franchise in the first place.

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    Mute Charlie Hunter
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    Jul 2nd 2018, 8:41 AM

    They should organise a protest a la Doonbeg wall scenario, get rent-a-mob down in numbers and overturn the ruling on humanitarian grounds …be handy for the protestors too with a McDonald’s in the vicinity for a bit of grub when they’re famished from all the chanting.

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    Mute Gerry Fallon
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    Jul 2nd 2018, 11:02 AM

    So you can sit in McDonald’s eating your big Mac and watch a crap rugby team play.
    Is it more to do with embarrassment than anything else?

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    Mute Rossi Rossborough
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    Jul 2nd 2018, 3:45 PM

    @Gerry Fallon:
    Gerry you are a, emmmmm, oh I know .
    A spastic!!!

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    Mute Paul Holland
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    Jul 2nd 2018, 12:55 PM

    I never like conflict like this because people lose and money goes on legal fees. I don’t know enough to form an honest opinion but I would say to the rugby club – you mightn’t be as badly off as the GAA were in Limerick when they tried to develop Punch Park in the city decades ago

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    Mute Eilish Kelly
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    Jul 4th 2018, 9:51 AM

    why don’t they build a wooden 8ft fence on there side of the boundary line. They could even paint a mural on the side facing out to McDonald’s on how playing GAA makes u fit ,healthy and part of the community ,Were eating junk food (burgers) makes u fat and unhealthy

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