Ex-PM Ahern says Irish economy was sound when he quit in 2008

By Padraic Halpin

DUBLIN, July 16 (Reuters) - Former Irish Prime Minister Bertie Ahern told a parliamentary inquiry on Thursday Ireland's economy was fundamentally sound when he resigned in 2008, six months before a deep recession began and the country's banking system almost collapsed.

Ahern stood down after 11 years in charge in May 2008, leaving his successor Brian Cowen to tackle the spectacular bursting of a property bubble that culminated in a humiliating international bailout two years later.

"Definitely," Ahern told a parliamentary inquiry into Ireland (Other OTC: IRLD - news) 's banking crisis when asked if he believed the economy was fundamentally sound when he left office.

"When I handed over, we were still in a good position. Of course, I wish the recession did not happen. However, it is disingenuous to suggest that all the gains this country made have been wiped out."

Ahern, the first leader to win three successive elections since the 1940s, disputed that the crisis was home-grown, as concluded in a 2011 government-commissioned report, telling MPs that if he met the author, he would "have an argument with him".

He said the global economic crash was too big for Ireland to handle and that he was let down by Ireland's Central Bank where there was "hardly any regulation" of the country's banks.

While saying he only become aware of a property bubble when prices crashed in 2009, Ahern acknowledged that cultivating an economic model around booming property sales was unsustainable, describing the reliance on property-related taxes as "ghastly".

"Was trying to have 14, 15 percent of your economy in one basket (property), was that sustainable? No, it wasn't. Was it wise? No, it wasn't. Was it dangerous to do that? Yes, it was," said Ahern, who was also finance minister during the 1990s.

Ahern resigned as prime minister in the middle of an anti-graft tribunal investigating the relationships between property developers and politicians that concluded he had lied about the source of substantial sums of money he received.

(Editing by Ralph Boulton)