Galway, Ireland - Portraying itself as a model of austerity as it rebounds from the crippling eurozone crisis, Ireland should have brought its presidency of the European Union to an end with aplomb.
But its outwardly sober, six-month term has been overshadowed by press leaks exposing the cavalier attitude of top banking officials towards a bailout that cost the taxpayer billions of euros.
A series of taped phone calls made in 2008 obtained by the Irish Independent newspaper revealed how, at the height of the international banking crisis, officials at the now-defunct Anglo Irish Bank discussed how to deceive regulators, poured scorn on the government, and derided the Germans who were working furiously to prop up Europe's failing banks.
The tapes confirm our worst fears. Inadequate regulators in the public sector were manipulated by the banks into the guarantee which may yet cost as much as €90bn [$118bn] in a country where there are only 1.8 million at work.
The revelations have provoked a storm of protest at a time when Ireland is slipping back into recession. The tapes were also described contemptuously by German Chancellor Angela Merkel at a recent European summit as "impossible to stomach”.
Sean Barrett, lecturer in economics at Trinity College Dublin, told Al Jazeera: "The tapes confirm our worst fears. Inadequate regulators in the public sector were manipulated by the banks into the guarantee which may yet cost as much as €90bn [$118bn] in a country where there are only 1.8 million at work.”
Anglo Irish was the first bank to seek help from the country's government after it had lent tens of billions of dollars to property developers before Ireland's property bubble burst and was nationalised in 2009.
The tapes include conversations about how Anglo went about receiving bailout funds, and suggest directors may have underplayed the extent of money needed to keep the bank afloat so as to stop the removal of deposits.
John Bowe, the head of Anglo's capital markets, is heard telling then chief executive David Drumm that he picked the figure of $9bn needed from the government "out of his arse”.
Bowe said if the government and central bank agreed to pay an initial $9bn, they would automatically be tied into handing over billions more.
The government rescue package for Anglo eventually ended up costing Irish taxpayers about $39bn, which Irish Prime Minister Enda Kenny described as the "single biggest financial transaction ever made in history of our state”.
After the failed bank was nationalised in 2009, Ireland was forced to go cap in hand for further funds from the European Union and the International Monetary Fund (IMF).
Drumm is heard on tape calling the central bank and regulator a "f..king shower of clowns”, and discussing obtaining funding from an investment bank by only naming their figure after getting the representative from the bank "drunk on five vodkas and a bottle of crystal champagne”.
The pair are also heard deriding Germany by singing an old version of its national anthem, "Deutschland über alles” - while looking to the country for help.
The Irish Independent has not named the source behind the tapes or how many it has access to, and is continuing to drip-feed them to the Irish public.
| Leaked tapes have damaged Ireland's standing[EPA]
In a statement released after the comments first surfaced, Bowe "categorically” denied the allegation that he had misled Ireland's central bank, or was aware of any strategy to do so.
Barrett said the country's government, central bank and financial services sector had "lacked the economic expertise required” to deal with the crisis, and he lambasted officials for "sleepwalking into the euro”.
"Sweden, Denmark and the UK did read the small print, spotted the euro's design faults and wisely decided not to join given their economic conditions,” said Barrett.
Echoing comments by Prime Minister Kenny that the tapes have damaged Ireland's standing, economist Constantin Gurdgiev told Al Jazeera while they put a face to those responsible for the crisis, they may ultimately do a disservice to the country.
Gurdgiev said the tapes could impose an "adverse reputational impact on Ireland that can only serve as a convenient excuse for Irish and European leaders to delay indefinitely meaningful assistance to Ireland in resolving banking debt”.
He added: "In this context, the tapes would play an unfortunate role of a catalyst for politically expedient denial of the problem currently already practised by the EU leaders.”
Unsustainable borrowing and on-lending during a period of economic boom lay at the heart of Ireland's banking crisis, and the rescue has saddled taxpayers with an enormous bill. The 2010 ECB and IMF bailout has already cost the country $112bn, which the Irish people will be paying for decades.
Ireland's budget deficit for this year, at 7.5 percent of GDP, is the highest in Europe. One in eight mortgage holders are in arrears, unemployment has soared, and weak demand has seen the value of exports plummet.
A significant milestone occurred earlier this year with the liquidation of Anglo Irish Bank and Irish Nationwide and the replacement of the promissory notes, which resulted in significantly improved investor confidence in Ireland.
But the government continues to put on a brave face as it tries to restore the dented image of an economy once nicknamed the "Celtic Tiger”.
A spokesperson for the Irish prime minister told Al Jazeera: "A significant milestone occurred earlier this year with the liquidation of Anglo Irish Bank and Irish Nationwide and the replacement of the promissory notes, which resulted in significantly improved investor confidence in Ireland.”
An official investigation is currently underway into dealings that took place at Anglo Irish Bank, and three former executives are expected to stand trial next year.
Drumm told journalists recently he is being made a scapegoat by "politically connected former bankers and politically protected senior public servants”.
After leaving Anglo in 2008, he fled to the US, where he filed for bankruptcy. He now resides in the upmarket Boston suburb of Wellesley in a house worth $1.4m.
The Fianna Fáil party has added its weight to those calling on the government to extradite the former Anglo Irish chief executive.
Paul Fallon is a freelance journalist based in Galway, Ireland
Source: Al Jazeera