Thursday Newspaper Review - Irish Business News and International Stories - - August 07, 2014
By Finfacts Team
Aug 7, 2014 - 11:59 AM

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Irish Independent

Brendan Keenan: What keeps one sane after 35 years in this game is that, unlike apparently more exciting but ultimately repetitive briefs such as sport or politics, in the field of economics and business, nothing is ever the same.

There is also the harmless amusement to be gained from watching the unshakeable belief of so many that things will turn out the same. Not so harmless for them, mind you, if they invest their money on that belief - or plan their election campaigns.

The coalition, one hears, is determined not to repeat the mistakes of the 1997 campaign. Like the poet Wendy Cope, they will probably make a different one instead.

Right now, the surprise is seeing so much discussion of the property market being based on the events of ten years ago. One would have to have been watching for a lot longer than 35 years to have seen anything like the present set of circumstances. Centuries, in fact.

We owe it to the meticulous Dutch bureaucracy to learn that King Billy paid more for the money to fight the Battle of the Boyne than the Netherlands government would have done on borrowings made last week.

The most recent drop in bond yields brought the French back to 1850. Astonishingly Spain which, let's face it, is still not in the healthiest state - saw the rates charged on its government debt at the lowest levels in 200 years.

Gross Domestic Product (GDP) will surge 3pc fuelled by a recovery in spending as well as improving investment. That compares with the more conservative 2.1pc forecast from the Department of Finance.

The think-tank also forecast that unemployment would fall below 10pc by the end of next year.

But at the launch of its latest economic commentary, the ESRI warned that growth prospects for the euro zone were "somewhat worrying" as Italy, the euro zone's third largest economy, slipped back into recession.

"We're seeing the domestic economy starting to make a contribution to growth," said the ESRI's David Duffy.

Eircom is taking a step closer to returning to the stock markets by moving its corporate debt to Jersey.

Eircom is taking a step closer to returning to the stock markets by moving its corporate debt to Jersey.

The telecoms group is still considering launching itself on the public market for a third time as part of its ongoing financial restructuring attempts.

While Eircom is an Irish company, its corporate debt is issued through a holding company in Luxemburg called Eircom Limited.

It aims to transfer those assets and liabilities to a new operating company, which would be incorporated in Jersey and tax resident in Ireland to give it greater flexibility to pay dividends to shareholders in the future.

“Eircom will engage with its shareholders, bondholders and lenders regarding the potential reorganisation through formal consent solicitation processes over the coming weeks,” it said.

Irish Times

The cost of sick leave in the public sector is “unsustainable” and is costing the State about €430 million, internal Government documents show.

The rate of sick leave for the estimated 300,000 employees in the public sector is almost twice that of the private sector.

Sick leave rates are highest in the Garda and health services – where between 10 and 12 days are lost per employee annually – but they are almost half that rate in the Defence Forces.

An enterprising group of UCD students is trying to ease the accommodation crisis for their peers by matching them with older people seeking company at home.

Calling themselves Generation Accommodation, the organisers are holding a series of information meetings in Dublin, starting this Saturday, to attract more people to the project.

It says it aims “to solve two pressing needs in our local communities”: the shortage of student accommodation, and “the single biggest problem facing older people living alone today: loneliness”.

Roisín Lee, one of the founders of Generation Accommodation, said: “We have already had a small number of homeowners who have contacted us and are keen to take part. In terms of students, the emails and phone calls have been coming in in floods.

Irish Life, which is owned by Great-West Lifeco, has posted earnings of €38 million for the second quarter, up from €34 million in the first quarter of 2014.

Irish Life generated €1.4 billion of sales and €102 million of Great-West Lifeco’s fee income for the second quarter.

Great-West Lifeco, Canada’s second-largest life insurer, said its second-quarter profit rose 18 per cent, helped by the acquisition of Irish Life last year.

Holidaymakers may be basking under the Italian sun but the country’s recently elected prime minister is feeling an unwelcome chill.

News that Italy has slipped back into recession signalled the end of Matteo Renzi’s political honeymoon. More importantly, it will raise questions about whether his government is serious about implementing what are aggressive but widely considered essential reforms of the euro zone’s third largest economy.

Figures out yesterday from Italy’s national statistics office said the economy shrank 0.2 per cent in the second quarter. The consensus forecast had been for growth of 0.1 per cent. It is the second successive quarter of negative growth as GDP shrank 0.1 per cent in the first three months of the year.

Irish Examiner

Russia has banned most food imports from the West in retaliation for sanctions over Ukraine.

The sweeping move will cost Western farmers billions but could also lead to empty shelves in Russian cities.

Earlier, Agriculture Minister Simon Coveney said Ireland "should expect a backlash" from Russia over EU sanctions.

Irish agricultural exports to Russia for 2013 were worth €235m.

The decision shows that President Vladimir Putin has no intention of bowing to Western pressure over Ukraine and will instead try to strike back at the West.

It also demonstrates that the Kremlin is ready to inflict damage on Russia while pursuing its course in Ukraine.

The US and EU have accused Russia, which annexed Ukraine’s Crimean Peninsula in March, of fermenting tensions in eastern Ukraine by supplying arms and expertise to a pro-Moscow insurgency. They have imposed asset freezes and loan bans on a score of individuals and companies.

Prime Minister Dmitry Medvedev said at a televised Cabinet meeting that Russia’s retaliatory ban covers all imports of meat, fish, milk and milk products, fruit and vegetables from the United States, the European Union, Australia, Canada and Norway. It will last for one year.


Euro Topics: According to Italy's National Institute for Statistics the country's economy has shrunk in the second quarter as well as in the first, meaning that the EU's third largest economy is back in recession. Prime Minister Matteo Renzi is failing to address the real problems with his reforms, commentators criticise, fearing Italy's downturn will spread to the rest of Europe.

Italian PM's environment is the problem: It is not Prime Minister Matteo Renzi but the political culture in the country that is to blame for Italy's current predicament, sociologist Luca Ricolfi writes in the liberal Italian daily La Stampa: "Today I would like to concentrate on the environment in which Renzi and his team are operating. By environment I mean the interplay of views, convictions and attitudes that have made it so easy for him to bulldozer his way forward so far. They, in my view, are the true cause behind Italy's inability to get back on its legs. They are the evil that neutralises any change. In this environment the belief prevails that the changes to the general rules (electoral law, form of government, federalism) about which politicians, intellectuals and journalists are so enthusiastic are more important than concrete economic and social measures. ... Moreover the idea that most of our economic problems come from abroad and that therefore we should be rescued from abroad is very popular."

Avert risk to Eurozone: The Italian government must accelerate its reform programme to prevent a weakening of the entire Eurozone, the conservative Spanish daily El Mundo urges: "When we consider that France's economy is stagnating and German growth is slowing down, the Eurozone is losing its major locomotives. This will have a negative impact on Spanish exports, which are key for our recovery. It's also likely that the IMF will be obliged to correct its prognoses for the peripheral states downwards, which will deter investors. Renzi must accelerate his reform programme, not only to save his own economy but also to avert the risk to the Eurozone."

Muslims as champion marksmen and chancellors: Mithat Gedik, born in Germany to Turkish parents, won a local championship of the Catholic confederation of sharpshooters, the Historic German Shooting Brotherhood Federation, last month. But then the title of shooting king was withdrawn because he is a Muslim. On Wednesday the Brotherhood decided that he may retain the title but may not participate in the next round of the competition. A bizarre and unnecessary controversy, the left-liberal daily Frankfurter Rundschau writes: "Religion is always a problem when it leaves its true domain, faith and the Church, and tries to impose its norms on other areas. ... Since the Enlightenment Europe has basically put this claim behind it, but some residues still exist, as we're seeing now. Everything is fine as long as religion remains a private matter - as it did with the marksman Mithat Gedik. His faith never interested anyone in the club until the religious police stepped in. ... This is not just a question of not taking our own biases to extremes: we should let our Muslim compatriots become shooting kings, footballs stars and even federal chancellors."

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