Updated 11.11pm

AT SOME STAGE, Enda Kenny’s love of telling stories was going to catch him out.

The Taoiseach loves to tell stories about the people he meets and what they told him. It’s part of his folksy, down-to-earth charm that leaves an impression on everyone who encounters him.

He might ask you where you’re from, then he’ll tell you a story about that place or some person he knows from that place, and give you a playful dig in the arm.

But Kenny’s ability to tell a good story has caught him out badly when it comes to the curious case of the Central Bank governor and the warning about the army being needed to guard ATMs.

There’s no doubt that at the height of the eurozone crisis in late 2011 and early 2012 there was a very significant risk that Ireland could exit the euro.

In response, and as Pat Leahy details in his book ‘The Price of Power’, the Irish government set up taskforce to discuss contingency plans. This included discussions about putting the army on standby given the extra security that would be needed around banks.

This was first publicly acknowledged by Simon Coveney in November 2014 when he said:

The Taoiseach was getting briefed by the Central Bank that actually he needed to have a fall-back position whereby the army may have to surround banks to protect them because we could literally run out of money.

Enda Kenny meeting a protester outside Government Buildings Source: RollingNews.ie

The implication was of a specific briefing to Kenny. Fianna Fáil’s Micheal McGrath followed this up with Dáil questions, but was told that the Central Bank would have no role in relation to briefing on security deployment.

At the time the Central Bank fielded queries about Coveney’s claims, with a source saying officials were “puzzled” by the remarks. They’ve been similarly “puzzled” by what the Taoiseach has said recently.

In June, at the height of the Greek bailout crisis, Kenny said that shortly after the government was elected it was given “very clear warnings” about the possibility of needing to restrict capital outflows from banks and “to have the army surround ATM machines”.

Then at a Fine Gael breakfast fundraiser on 7 October, Kenny was even more specific:

It was more interesting when the head of the Central Bank came in on a Wednesday and said: ‘I have to tell you Taoiseach that it’s probably likely that you will have to put the army around the ATM machines on Friday. We may well have to print money, we may well have to introduce capital controls, this is not going to be nice.’

From what he said there, one could not help but interpret that the governor of the Central Bank arrived in the Taoiseach’s office to provide a briefing to the effect that Ireland was 48 hours away from having to introduce capital controls and potentially deploy the army.

When we put this to a source close to Kenny yesterday, they admitted: “I could see how that might imply the two of them sitting in a room talking about it, but I am telling you that’s not what happened.

It is the case that there was no specific briefing between the two but we never claimed there was. There was a conversation around contingencies. It involved the Central Bank, the Department of the Taoiseach, and the Department of Finance.

While it is the case that the Taoiseach never said specifically: “I was briefed by Patrick Honohan”, it was the clear implication of his comments both on 7 October and in Madrid last week, when he told a gathering of the European People’s Party:

The Governor of the Central Bank in Ireland said to me: ‘It looks like this weekend … you’ll have to put army around the banks and around the ATM machines and introduce capital controls like they had in Cyprus.’

Source: Sam Boal

His comments implied a situation of such gravity that Ireland was days away from implementing capital controls. It was as if Honohan was briefing on the expected timeline for capital controls and the need to deploy the army.

But when asked yesterday if there was that specific briefing from Honohan, Kenny’s response was emphatic:

No. Not specific, no.

This evening the Taoiseach can at least take some solace in Tanaiste Joan Burton, coming to his defence.

Speaking at the Labour Party Arts Policy Forum earlier this evening, she said, “The Taoiseach was speaking at an international conference, he has set out very clearly I think the sequence of events and I think he has dealt with it very comprehensively.”

Asked about the Taoiseach taking artistic licence, Burton said:

As we’re at an arts forum this evening, I may be entering into the area of being quite artistic myself.

The controversy this has caused in recent days, and the significant criticism Kenny has faced from opposition, was entirely avoidable if only he had kept it as broad as he did in public comments yesterday.

“The government did set up a task force comprised of a number of departments and agencies of which the Department of Finance, the Taoiseach, the Central Bank and so on were involved,” he said.

They considered all of these contingencies and clearly, as was pointed out to you by the Minister for Finance, the question of security in the event of a breakup of the euro currency was one that was considered. That didn’t happen obviously and we’re now in a much better place.

There’s no doubt security implications of capital controls were discussed, at the highest levels of government, with all possibilities including deploying the army mentioned.

This was serious enough to portray just how perilous a situation we faced back in late 2011 and early 2012.

Recounting this would have been satisfactory enough in Madrid last week and wherever else Kenny has said it, but in his earnestness to make things as dramatic as possible – and tell a good story – he was caught out.

He might think twice before doing it again.

- First published 9.15pm

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