DUBLIN As Ireland teetered on the edge of bankruptcy in October 2008, its then-finance minister Brian Lenihan hailed the government's rescue of its banks as the "cheapest bailout in the world".
Five years later, the bank rescue has cost 64 billion euros - 40 percent of annual output - and condemned Ireland's 4.6 million people to years of austerity.
Leaked conversations of executives at a failed bank mocking its rescue have stoked ire across Europe and the economy is back in recession, making it hard for Brussels, which ended up bailing out the whole country, to hail Ireland a reform success.
Eamon O'Cuiv, a minister at the time of the bank rescue, said the banks gave entirely different information on the state of their finances from that which came to light this week.
"Now we know that they were lying through their teeth and they were brazenly doing it," he told Reuters.
The Irish have remained sanguine compared with huge protests in Greece or Spain, despite enduring salary cuts, tax rises and a tripling of unemployment. But transcripts published by the Irish Independent have uncovered a deep well of latent anger.
The leaked tapes show executives at Anglo Irish Bank, now liquidated, joking about a blanket guarantee on deposits and their demands for almost random, vast sums of "moolah" - slang for money - to stay afloat.
The anger is exacerbated by the lack of justice - no bankers have yet been put on trial, many of the politicians still serve in parliament and there has been no full public inquiry - and is apparent across a country littered with empty homes, relics of a boom fuelled by reckless bank lending.
The shell of what was to be Anglo Irish headquarters looms over Dublin's River Liffey, waiting to be completed and occupied by the central bank that bailed it out. In a nearby shopping center, half the units are empty and there is little optimism.
"Bernie Madoff probably wishes he registered in Ireland," said financial services worker John Sheehy, 35, referring to the U.S. financier convicted of operating a huge pyramid scheme.
"He'd be sitting down having a pint with the rest of them."
IMPOSSIBLE TO STOMACH
With signs of economic recovery petering out, the bankers' behavior has prompted criticism from Germany and concern in Brussels, where officials have praised Ireland's efforts to complete the 85 billion euro IMF/EU bailout this year.
Germans are angry about what they see as profligacy in indebted euro zone states and the behavior of Irish bankers, caught on tape mocking Germany, is an untimely reminder of the sharp imbalances that are straining the bloc.
"For people who go to work each day and earn an honest living, this kind of thing is very hard to take, it's impossible to stomach," said German Chancellor Angela Merkel.
The EU is desperate for Ireland to exit the bailout smoothly to show that its austerity medicine can succeed, given the struggles of Greece and Portugal and deep-rooted public dissatisfaction across the bloc.
There, the real problem is not the reputational damage caused by bad boy bankers or accusations by U.S. senators that Ireland is a tax haven, but the still-weak economy.
Ireland is still set to become the first euro zone country to emerge from a bailout at the end of the year having met nearly all its funding needs through 2014.
But if growth remains around the probable 2013 rate of 1 percent over the next few years, the International Monetary Fund forecasts that Ireland will not be able to bring its budget gap below the EU's 3 percent ceiling. Debt would rise to 130 percent of national output, far above sustainable levels.
The center-right government of the time - swept from power in 2011 - had been backed into a corner by the chaos and lack of clear information after the collapse of Lehmann Brothers. Other banks are still keen to distance themselves from Anglo Irish, which they viewed as the most irresponsible.
"The decision they faced was, do we allow our banking system to implode?" said Antoin Murphy, an economics professor at Trinity College Dublin.
In an affidavit filed in June 2010, Denis Casey, chief executive of Irish Life and Permanent in 2008, called for an investigation into "extensive systemic support and patronage" enjoyed by Anglo Irish and confirmed he was available to assist.
"I'm shocked and disgusted by it, it's not reflective of the culture that existed in Irish banking at the time and certainly didn't reflect the culture of Irish Life and Permanent," Casey, referring to the tapes, told Reuters in his first public comments since he quit in 2009.
"Things were moving very quickly, in the week after Lehman's, there was a sense of panic, we were in completely uncharted territory," said Casey. "Every dollar and euro of non-domestic deposit that matured was being withdrawn."
Anglo Irish's treatment of more than 7 billion euros of reciprocal short-term deposits from Irish Life and Permanent in 2008 is part of a five-year police probe into Anglo Irish. Three ex-Anglo Irish executives, including ex-chairman Sean FitzPatrick, go on trial on fraud charges next year.
Widespread fury remains at the tapes, not just against Anglo Irish but also other banks that needed taxpayers' money and the politicians who did the deal. The story has dominated news shows, with headlines blaring "Why is no one in jail?" and "Another day, another billion".
"It will leave scars," said one EU official. "How enthusiastic would you be, if you were German, to say: 'we need to help these guys'. These people should come forward and say sorry."
(Additional reporting by Conor Humphries in Dublin, John O'Donnell in Brussels, Laura Noonan in London and Noah Barkin in Berlin; editing by Philippa Fletcher)