Former taoiseach Brian Cowen on Thursday insisted he was happy with the decisions he made as minister for finance, but apologised for the hardship and stress caused by the economic crisis.

Mr Cowen robustly defended his time as minister at the Department of Finance and insisted every measure he took was in the public interest.

He told the Banking Inquiry nobody saw the financial crisis coming, and claimed anyone who suggested they did were being "politically and intellectually dishonest".

Mr Cowen insisted he did not want to try to shift blame, and accepted responsibility for what happened during his time in office. “I am sorry that the policies we felt necessary to put in place in responding to the financial crisis brought with it hardship and distress to many people.

‘Human cost’

“The human cost of dealing with this crisis, which we sought to mitigate as best we could, was the most difficult aspect of the decisions we had to make. What we did was about restoring financial stability to the country.”

Asked if he considered his term successful, Mr Cowen insisted he was happy with the decisions he made as minister for finance, but, in hindsight, he would have done some things differently.

The former Laois-Offaly TD said there had been a view expressed that he ignored the rapid increase in property prices.

“It has since been alleged that no action was taken by our government to deal with these risks. This seems to be based on a view in some quarters it seems that I was in some way beholden to property market interests.

“This is simply not true. The facts are that prior to any signs of an emerging international crisis, there were four important actions taken to attempt to minimise the potential vulnerabilities in the banking sector related to the dependence on highly valued property.”

Property prices

Mr Cowen said he took a series of measures to deal with the escalation of property prices and without those measures, the crisis would have been “far worse”.

The former Fianna Fáil leader said: "It didn't set out to sustain and develop a property bubble; it set out to ensure that we could ease the bubble back on a soft landing projection, as was being suggested would happen."

Mr Cowen said it was clear now that the country had “failed the test of prudent fiscal management”, but he insisted every policy he pursued he believed to be best for the country.

Fianna Fáil’s Michael McGrath asked about the decisions taken in budgets and whether politicians made decisions based on what the electorate might think of them.

Mr Cowen said: “We don’t live in a technocracy here, we live in a democracy - and you make decisions and you’ve to stand over those decisions.

“I’ve explained, going into that budget same as others, first of all the pre-budget submissions treated the very same as at any other time, courteously. We see what it is they’re talking about, can we assist in any way or can we not.

‘Cut the nonsense’

“I’m not going to be foolish in front of the Irish public and say it’s never a consideration in an election year - now let’s just be honest about it and cut the nonsense.”

The first round of questioning lasted five hours for Mr Cowen and focused on his tenure in the department from 2004 to 2007.

Socialist TD Joe Higgins asked the former Fianna Fáil leader whether the Galway Tent was an appropriate way to fundraise for the party.

He said other parties have “dos” in Punchestown and there is not a word about it the media. Fianna Fáil, he said, was in debt when he was leader.

“I had read this thing about, you know, the mythology that grows up about contracts being signed and big meetings being held in this tent, and if there were, I mean, why would you be bringing the media to sit down beside you, if there was all this surreptitious activity going on? Sure, it’s all nonsense.

“The people were attending a race meeting and we, as a political party, a democratic party that has audited accounts, you know, there for everyone to see, where people were able to come and take part in what was going on there.”