Minister for Health and Children

When Fianna Fáil returned to power following the 1997 general election, Cowen was appointed as Minister for Health and Children. He described his period there as like being in Angola because administrative "landmines" could detonate without warning.^[28] During his tenure, he had to deal with problems of bed shortages and overcrowding in hospitals, as well as a prolonged nurses' strike in 1999. It came as a relief to Cowen when he was moved to the post of Minister for Foreign Affairs in a cabinet reshuffle in January 2000.

Minister for Foreign Affairs

Cowen's tenure as Foreign Minister saw extensive negotiations continue regarding the Northern Ireland peace process and other international activities, particularly when Ireland gained a place on the United Nations Security Council. In 2003, he was the victim of a personal attack by the leader of Northern Ireland's Democratic Unionist Party, Ian Paisley, a former outspoken critic of Ireland and its government. In front of a crowd of party supporters and in the presence of television cameras and radio reporters, Paisley uttered a diatribe about Cowen's personal appearance and also insulted his mother.^[17] In 2004, Cowen played a key role during Ireland's Presidency of the European Council and the simultaneous expansion of the European Union.

Minister for Finance

Following the departure of Finance Minister Charlie McCreevy, upon his nomination as Ireland's European Commissioner in September 2004, Cowen was appointed as Minister for Finance. On 1 December 2004, he announced his first budget, one that was viewed as a give-away budget in which spending was increased by 9%.^[29]

Cowen's second budget in 2005 was dominated by a new childcare package, and measures to take 'tax-free millionaires' back into the tax net from 2007 by restricting tax breaks. A readjustment of income-tax measures were designed to take 52,000 low earners out of the tax net and remove 90,000 middle earners from the higher tax band.^[30]

Cowen's third budget in 2007, in anticipation of the 2007 general election, was regarded as one of the biggest spending sprees in the history of the state. The €3.7 billion package included increases in pension and social welfare allowances, a marked green agenda, as well as a reduction in the top rate of income tax from 42% to 41%. Cowen has been criticised for alleged complacency during the economic turmoil in January 2008.^[31]

Treaty of Lisbon

The Irish electorate's rejection of the ratification of the Treaty of Lisbon on 12 June 2008, was viewed by some media and political observers as a protest against Cowen and his government.^[38] The Irish Independent called the failed referendum's aftermath the government's "biggest political crisis in decades".^[39] Columnist Brendan O'Connor called the outcome "a humiliating failure for Cowen and the people who put him there".^[40][41] The Taoiseach himself arguably dealt a damaging blow to his own side when, on 12 May 2008, he admitted in a radio interview that he had not read the Treaty of Lisbon in its entirety.^[42] The treaty was eventually approved by Irish voters when the successful Twenty-eighth Amendment of the constitution was approved in the second Lisbon referendum, held in October 2009.

2009 Budget

Cowen delivered the Irish government budget for 2009 on 14 October 2008, brought forward from its usual December date due to the global financial crisis. The budget, labelled "the toughest in many years",^[43] included a number of controversial measures, such as a proposed income levy and the withdrawal of previously promised HPV vaccines for schoolgirls. Other results of the budget included a new income levy being imposed on all workers above a specified threshold and the closure of a number of military barracks near the border with Northern Ireland.

Public outcry arose over the proposed withdrawal of medical cards and the reinstatement of university fees. A series of demonstrations ensued amongst teachers and farmers, whilst on 22 October 2008, at least 25,000 pensioners and students descended in solidarity on government buildings at Leinster House, Kildare Street, Dublin and outside the Department of the Taoiseach in Merrion Street. Some of the pensioners were even seen to cheer on the students as the protests passed each other on the streets of Dublin.^[44] Changes to education led to a ministerial meeting with three Church of Ireland bishops over what was viewed as a disproportionate level of cuts to be suffered by Protestant Secondary schools.^[45] Separately representatives of the Roman Catholic Church were assured by O'Keeffe that it would continue to be able to provide religious instruction to pupils in primary schools not under the patronage of the Church.^[46]

Rebellion within the ranks of the government led to a number of defections of disenchanted coalition members. County Wicklow TD Joe Behan, resigned from the Fianna Fáil party in protests at the proposed medical card changes. He, alongside two other government deputies, later voted against his former colleagues in two crucial Dáil votes on medical cards and cancer vaccines. These defections reduced the Irish government's majority of twelve by one quarter. Finian McGrath, an Independent TD, who agreed to support the government after the 2007 election, also withdrew his support from the government. A senior political source said: "The Budget was an accident waiting to happen."^[47]

Under the European Union stability and growth pact, EU states are required to keep their budget deficit-to-GDP ratio below a three percent limit and maintain a debt-to-GDP ratio below 60 percent. On 31 October 2008, the European Commission opened an excessive deficit procedure against the Government of Ireland, for allowing its budget deficit to exceed the required EU deficit-to-GDP ratio of 3 percent. The Irish deficit was expected to be 5.5 percent in 2008, and 6.5 percent in 2009.^[48] This response forced reversals of proposed changes in several areas, contributing to perceived weakness in his Government.^[49]

2008 Pork crisis

On 6 December 2008, the Food Safety Authority of Ireland ordered the recall, withdrawal and destruction of all Irish pork products dating back to 1 September, due to the discovery of toxic levels of dioxin in a small percentage of the pig stock. Cowen additionally approved a five-day withdrawal of Irish pork from the market. Within days thousands of jobs were either lost or under threat at pig processing plants across the country, as processors refused to resume slaughter of pigs until they received financial compensation; the crisis ultimately cost taxpayers approximately €180 million.^[50] Cowen's government received heavy criticism for overreaction in its handling of the incident,^[51] with Leader of the Opposition Enda Kenny calling the government's response as "an unmitigated disaster".^[52]

Anglo Irish Bank

The heavy exposure of Anglo Irish Bank to property lending, with most of its loan book being to builders and property developers, meant that it was badly affected by the downturn in the Irish property market in 2008.^[53] On 15 January 2009, after attempting to salvage the Bank by injecting €1.5bn into its coffers, the Government announced that it would take steps that would enable the Bank to be taken into State ownership. The Anglo Irish Bank Corporation Act, 2009 provided for the transfer of all the shares of the Bank to the Minister for Finance and was enacted under Irish law on 21 January 2009. On the same date, the Bank was re-registered as a private limited company.^[54] Observers at the time commented that the government had been slow to respond to the collapse of the Bank, with The Sunday Times stating that "Nationalisation was good enough for other European governments, but Brian Cowen's administration avoided the inevitable until its back was to the wall. Too frequently, it is seen to be reacting to events, not controlling them."^[6]

2009 Emergency budget

In a second emergency budget, delivered in April 2009, a fiscal deficit of 10.75 percent of gross domestic product (GDP) was addressed.^[55] The budget's initiatives included a doubling of the previous year's income levy to 2%, 4% and 6%; increases on the excise duties on a regular packet of cigarettes (25 cents) and a litre of diesel (5 cents); a new "asset management agency" established to remove bad loans from Irish banks; the gradual elimination of early childcare supplement by 2010, to be replaced by a subsidy towards pre-school for 3- and 4-year-olds; and no further increases in social welfare for at least two years.^[56] Cowen defended the emergency measures as necessary.^[57]

First no confidence vote

National and international press reactions to the budget were largely favourable, with the economics editor of the BBC reported that there were lessons for the United Kingdom to learn from this emergency procedure and the European Commission hailing the budget as a form of "decisive action".^[58] However, it did little to revive the political fortunes of Cowen's government. After Fianna Fáil performed badly in the elections of 5 June 2009, losing half its European Parliament seats, Fine Gael tabled a motion of no confidence against Cowen on 9 June. He survived the vote by a margin of 85–79.^[59] Support for the government continued to fall: on 3 September 2009, an Irish Times/TNS mrbi poll, opinion poll^[60][61][62] reported that Cowen's satisfaction rating had dropped six points to 15 percent, with 77 percent of voters saying they were dissatisfied with the way he was doing his job.

2010 Budget and NAMA controversy

Cowen meeting with Argentine President Cristina Fernandez in 2010.

Cowen's government's third budget within 14 months, delivered on 9 December 2009, saw the government facing the reality of the country nearly becoming insolvent.^{[63] [64]} The 2010 Budget was described by commentators in Ireland and around the world in unusually harsh terms as €4 billion was removed from the country's national deficit; The Irish Times labelled it "the most austere Budget in the history of the State".^[65] It was characterised by pay cuts for public sector workers and cuts in social welfare. According to the BBC, social welfare cuts had not been implemented by the country since 1924.^[66] The cuts prompted at least one angry outburst in Dáil Éireann.

In February 2010, Cowen defended his claim that the National Asset Management Agency (NAMA) would increase the supply of credit into the economy despite the International Monetary Fund (IMF), saying it would not lead to any significant increase. "People should contemplate what level of credit accessibility we'd have in this economy without NAMA," he said. "It's not just sufficient in itself obviously for credit flow, it's certainly an important and necessary part of restructuring our banking system, of that there's no doubt, in terms of improving as a location for funding of banking operations," said Cowen. He previously said that the Government's objective in restructuring the banks through NAMA was to "generate more access to credit for Irish business at this critical time". In September 2009, the Minister for Finance, Brian Lenihan, expressed a similar view, saying it would lead to more lending for business and households. Cowen was responding to reports published on 8 February, that the IMF had told Brian Lenihan in April 2009, that the NAMA would not lead to a significant increase in lending by the banks.^[67]

The comments, which appear in internal Department of Finance documents released under the Freedom of Information Act, were made by senior IMF official, Steven Seelig, who was to join the board of NAMA in May 2010. Minutes of a private meeting at the department between Brian Lenihan and IMF officials on 29 April 2009, state that the "IMF (Mr. Seelig) do not believe that Nama will result in significant increase in bank lending in Ireland". The Government has maintained that NAMA's purchase of bad loans from the banks with State bonds would increase the flow of credit in the economy since the plan was unveiled April 2009. Speaking at the publication of the NAMA legislation in September 2009, Mr. Lenihan said it would "strengthen and improve" the funding positions of the banks "so that they can lend to viable businesses and households". The IMF estimated in their published report that domestic banks would face losses of up to €35 billion, though the department pointed out this would be partly funded from operating profits and provisions already taken against some loan losses.^[67]

Second no confidence vote

Cowen arriving at the 2010 National Day of Commemoration

Speaking on RTÉ on 15 May 2010, Cowen said that, in hindsight, he should have introduced a property tax to cool the property boom. Responding to the Taoiseach's defence of his actions as minister for finance, Leader of the Opposition Enda Kenny accused him of "washing his hands" of his role in Ireland's economic crisis. Speaking during a front bench meeting in Cork, Kenny also claimed Fianna Fáil was spreading fear by considering cuts to the old age pension. "Sorry is a word that Fianna Fáil do not recognise, they don't understand," Kenny told party colleagues. Kenny said Taoiseach Cowen, in defending his own personal handling of events, was refusing to acknowledge that he drove the economy "up on the rocks" for four years when he was Minister for Finance. "He expects everybody else to accept responsibility for it but not him. It's another example of hands being washed by those in charge, a refusal to accept responsibility for their part in destroying the Irish economy and heaping economic woes . . . upon so many people." The Fine Gael leader said the best thing the Taoiseach could do was to hold the three pending by-elections, or a general election, so the people could have their say.^[68]

On 15 June 2010, Cowen faced his second no-confidence motion in just over a year, tabled by Fine Gael after the publication of two reports that criticised government policies in the run-up to Ireland's banking crisis. He again survived the motion, 82–77.^[69]

EU and IMF rescue

On the evening of 21 November 2010, Cowen confirmed that Ireland had formally requested financial support from the European Union's European Financial Stability Facility (EFSF) and the International Monetary Fund (IMF), after long resisting pressure from other eurozone nations, particularly France and Germany.^[70][71] On 28 November 2010, the European Commission agreed to an €85 billion rescue deal of which €22.5 billion from the European Financial Stability Mechanism (EFSM), €22.5 billion from the IMF, €22.5 billion from the European Financial Stability Facility (EFSF) and bilateral loans from the United Kingdom, Denmark and Sweden. The remaining €17.5 billion will come from a state contribution from the National Pension Reserve Fund (NPRF) and other domestic cash resources.^[72]

The bailout was widely seen in Ireland as a national humiliation, and by some as a betrayal of the long-fought struggle for Irish independence whose legacy forms a major part of the Irish identity. The Irish Times editorialized:

whether this is what the men of 1916 died for: a bailout from the German chancellor with a few shillings of sympathy from the British chancellor on the side. There is the shame of it all. Having obtained our political independence from Britain to be the masters of our own affairs, we have now surrendered our sovereignty to the European Commission, the European Central Bank, and the International Monetary Fund.^[73]

On 24 November 2010, Cowen unveiled a four-year plan to stabilise the economy by 2014.^[74] The plan was met with great protest as it included deeply unpopular elements, including drastic cuts in social welfare, the lowering of the minimum wage, and an increase in the value added tax while maintaining the state's low corporate tax rate.^[75] In recognition of the political disaster this would inflict on his government, Cowen indicated that the election would take place in early 2011, after the 2011 budgetary process has been completed, though at the time he would not set a specific date.^[76]

Meeting with Seán FitzPatrick

It was revealed following the publication of the book,^[77] The Fitzpatrick Tapes^[78] by Tom Lyons and Brian Carey, that two previously undisclosed meetings had occurred between Seán FitzPatrick, the Chairman of Anglo Irish Bank, and Brian Cowen.

The first was a telephone call in March 2008, while Cowen was overseas in Vietnam and when Cowen was then Minister of Finance.^[79] The second meeting took place on 28 July 2008, at Druids Glen, County Wicklow.^[80][81]

At that time Anglo Irish Bank was badly affected by the downturn in the property market.^[53] On 28 September 2008, the Irish government made the decision to introduce a bank guarantee to cover Anglo Irish Bank, Allied Irish Banks and Bank of Ireland. Seán FitzPatrick was forced to resign in January 2009, over the Anglo Irish Bank hidden loans controversy. The meeting, over a seven-hour period, took place over a round of golf and a subsequent dinner with Fitzpatrick and two other directors of Anglo Irish Bank.

During a heated Leader's Question session in Dáil Éireann, which ran over the allotted time considerably, Cowen denied that Anglo Irish Bank had been discussed.^[82] However, when questioned by the Sinn Féin Dáil leader Caoimhghín Ó Caoláin (who had been attending a wedding at the hotel and by chance had encountered Cowen and Fitzpatrick), Cowen was forced to admit that there were two other people at the meeting, Gary McGann, a director of Anglo Irish Bank and Alan Gray, a director of the Central Bank and currently managing director of a consultancy company Indecon.^[83] Brian Cowen has claimed that the meeting was a social event, while Gray has stated that he was invited to provide economic advice on stimulating the economy.^[84] Tánaiste Mary Coughlan, described the purpose of the meeting as a fundraiser for Fianna Fáil.^[85]

Cowen subsequently threatened to sue Caoimhghín Ó Caoláin, if he repeated the accusation outside the Dáil. Ó Caoláin responded by repeating the accusation in public and inviting Cowen to take him to court.^[86]

January cabinet reshuffle

In the stir created by the revelations of Cowen's meetings with Fitzpatrick, Labour Party leader Eamon Gilmore, announced his plan to table a third motion of no confidence in Cowen's government.^[87] At the time, however, Cowen's more immediate concern was pressure from within his own party to step down as leader of Fianna Fáil. Cowen announced on 16 January 2011, that he would not resign as party leader of his own accord; however, he would put down a motion of confidence in his leadership at Fianna Fáil's parliamentary party meeting on 18 January 2011, to be decided by secret ballot. Foreign Minister Micheál Martin, publicly announced that he would vote against the motion, effectively presenting himself as a challenger to Cowen's leadership.^[88][89][90] On the evening of 18 January 2011, Government Chief Whip John Curran, announced that Cowen had prevailed in the confidence vote, although the exact counts were to remain secret and the ballots had been shredded.^[91] Cowen also announced that he had "reluctantly" accepted Martin's resignation from his government.^[91]

The following day, however, Cowen forced the resignations of four more Ministers, Noel Dempsey, Dermot Ahern, Tony Killeen and Mary Harney;^[92] the day after that, another Minister, Batt O'Keefe, resigned. The Ministers who resigned had already declined to contest the 2011 general election. The resignations were engineered to allow Cowen to appoint new Ministers, who might strengthen his party's position for the election. However, the junior coalition partner, the Green Party, expressed outrage that they had not been consulted about the reshuffle. The Greens accordingly refused to endorse Cowen's intended replacements, forcing Cowen to reassign the vacant portfolios to incumbent Ministers. The Green Party also threatened to pull out of the government unless Cowen set a firm date for the general election; Cowen subsequently announced it would take place on 11 March 2011. When Cowen addressed the Dáil to announce the reshuffle, the Green Party were absent and had not taken their seats in the Dáil that day. The Independent later concluded that the failed reshuffle left Cowen "an isolated, hugely damaged figure".^[7]

Moreover, Green Party leader John Gormley publicly stated that trust between the coalition parties had been greatly eroded, perhaps irreparably.^[93] At that point, members of Fianna Fáil, including many of those who had previously announced support for Cowen in the party's confidence motion, began questioning his leadership and pressing for his resignation from the leadership of the party before the election.^[94] The press, meanwhile, compared the attempted reshuffle and its fallout to the GUBU political disaster of the early 1980s Charles Haughey government, up to that point the most sensational political scandal in the history of Ireland.^[95][96] Fianna Fáil, already at a record low 14% approval rating, slid in the wake of the botched reshuffle to 8%.^[97]

Resignation as leader

Faced with a fractured coalition, rebellion within his own party, and an acknowledged public relations disaster,^[98] Cowen announced his resignation as leader of Fianna Fáil on 22 January 2011. He insisted, however, that he would continue as Taoiseach, until the election, in order to complete legislation for the 2011 budget.^[4]

The resignation did not quell the consequences of Cowen's actions. Labour leader Eamon Gilmore announced that he would go forward with his no-confidence motion on Wednesday, 26 January 2011. Leader of the Opposition Enda Kenny also announced that if Cowen did not ask President Mary McAleese for an immediate dissolution of the Dáil, his own party would table a no-confidence motion in the Taoiseach on Tuesday, ahead of Labour's motion.^[99] Then, on Sunday the 23rd, less than 24 hours after Cowen announced his resignation, the Greens tore up the coalition agreement and pulled its two ministers, Gormley and Eamon Ryan, from the government. Cowen accepted their resignations. This left Cowen at the head of a minority government, with seven Ministers (the absolute minimum mandated by the constitution of Ireland), and facing two consecutive no-confidence votes in the Dáil.^[100]

Finance Bill, dissolution and retirement

On 24 January 2011, Finance Minister Brian Lenihan met with delegations from Fine Gael, Labour, and the Greens, striking a final deal. Labour and Fine Gael agreed to drop their no-confidence motions in exchange for an agreement that the finance bill would be finalised in the Dáil by Friday the 28th (with the Seanad to finalise on Saturday), upon which Cowen would immediately request that President McAleese dissolve the Dáil.^[101]

The Dáil passed the finance bill on 27 January 2011, with the Seanad following on 29 January.^[102][103] Accordingly, Cowen asked McAleese to dissolve the Dáil on 1 February 2011. In accordance with Irish constitutional practice, McAleese duly granted the dissolution.^[104] Cowen subsequently confirmed that the general election would be brought forward to 25 February 2011.^[105] Cowen also announced that he would not contest his Dáil seat. He said he would retire from politics, after 27 years.^[5]

The pent-up resentment at Cowen's government resulted in a debacle for Fianna Fáil at the general election. The party suffered the worst defeat of a sitting government in the history of the Irish state, falling to only 20 seats for third place—the first time since 1927 that it was not the largest party in the chamber. Cowen was succeeded by Leader of the Opposition Enda Kenny as Taoiseach, leading a Fine Gael-Labour coalition, which took office on 9 March 2011. As Cowen was no longer a TD when the new Dáil convened, he was unable to preside over the opening, and Fianna Fáil Leader Micheál Martin and outgoing Finance Minister Brian Lenihan appeared on the government front bench in his place.

Morning Ireland interview

On 14 September 2010, after an interview on RTÉ's Morning Ireland,^[123] Cowen was described by Deputy Simon Coveney of Fine Gael as sounding as if he was intoxicated or hungover. The interview was on the morning of day two of his party's annual pre-Dáil meeting held at the Ardilaun Hotel in Galway.^[124] Cowen rejected^[125] the allegations, describing them as "pathetic". However, this incident has been unfavourably commented upon by the international press,^[126][127] and dubbed "Gargle gate" by the domestic media.^[128][129] A brief sketch about Cowen that appeared on a subsequent episode of the American talk show The Tonight Show With Jay Leno, in which host Jay Leno described Cowen as a "drunken moron" and acted with incredulity towards his status as Taoiseach, received coverage in the Irish media and further damaged Cowen's public image.^[130]

He apologised for his interview performance the following day saying, "It wasn't my best performance and I would like to apologise for that. I would hate to think the reputation of the country or the office of Taoiseach would in any way be affected by what I had to say."^[131] He claimed that there was a hoarseness in his voice and denied that he had been hungover. His version of this event was substantiated in 2017, by his interviewer who stated that Cowen was weary and not drunk or hungover.

Approval ratings

Although Cowen's satisfaction rating had sunk to 18% in Ireland, by August 2010, he was listed as one of the top ten leaders in the world by Newsweek magazine, which praised his handling of the Irish economy. While The Wall Street Journal stated that "Cowen has presided over the worst economic crisis in modern times",^[132] Newsweek ranked him fifth in the world after David Cameron, Mohamed Nasheed, Nicolas Sarkozy, and Wen Jiabao.^[133][134]

According to TheJournal.ie, Cowen was "the least popular incumbent in the history of [Irish] opinion polling," with approval between 8 and 10 percent of the electorate.^[3] As of January 2011, Fianna Fáil's popularity had fallen to a record low and was tied with Sinn Féin on 14% in joint third place.^[135][136]