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Friday Newspaper Review - Irish Business News and International Stories - - August 08, 2014
By Finfacts Team
Aug 8, 2014 - 12:02 PM

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Irish Independent

A clampdown on health service managers who are failing to implement spending cuts, particularly around wage costs, is being planned by the Government.

A senior minister told the Irish Independent that executives have been "pulling rubber levers", by making decisions at the top with no implementation on the ground.

Senior government figures have been repeatedly frustrated by the failure to reduce staffing costs in hospitals as a result of the continued employment of agency workers.

"The over-reliance on agency staff is actually costing more," a coalition source said.

The failure to manage budgets has resulted in repeated spending overruns, which this year is heading towards €450m. The HSE is set to miss its €290m savings target under the Haddington Road Agreement this year by as much as €100m.

But Health Minister Leo Varadkar has vowed there won't be an overrun in the health budget next year and is understood to be planning to ensure spending targets are reached.

And Public Spending Minister Brendan Howlin says senior management have been pulling "rubber levers" with no action on the ground.

Mr Howlin appears to be more confident about dealing with Mr Varadkar on managing spending than his processor, Dr James Reilly.

The speed at which house prices are rising is a "concern," the head of KBC Bank Ireland has said.

Mr Wim Verbraeken, who took over as chief executive of KBC Bank Ireland in November last year, said a lack of homes available to buy in Dublin in particular is hitting the market, including creating a gap between the number of new home loans approved by the bank and actual number drawn down.

The squeeze on supply is seen as the main factor driving up house prices at a pace not seen even during the boom.

"When prices increase by 20pc I think it is a reason for concern, despite that being from a low base," Mr Verbraeken told the Irish Independent.

And he questioned this week's report from the Economic and Social Research Institute (ESRI) that suggested Irish house prices are undervalued.

"Any under-valuation in Dublin may be small or non-existent," he said.

Prices in UK shops fell by a record in July, indicating inflation pressure remained subdued as Bank of England officials began their monthly policy meeting.

The British Retail Consortium (BRC) said that prices at stores fell an annual 1.9pc, the most since the series began in 2006. Food-price inflation slowed to a record low of 0.3pc from 0.6pc.

"This is great news for households who are benefiting from fierce competition within the industry," said BRC's director general Helen Dickinson.

"Against a backdrop of stable commodity markets, the stronger sterling making imports cheaper and wavering retail spending, current levels of deflation are expected to continue."

This comes just days after new figures showed retail sales in the euro zone rose at the fastest rate in seven years in June - and twice as fast as expected - thanks to strong sales of both food and non-food products.

Irish Times

Ten local authorities will make payments totalling almost €3.7 million to former members of city, county, borough and town councils who retired or lost their seats in the local elections or as a result of the abolition of town councils.

This figure excludes payments due to former councillors who have not yet reached the age of 50 who will receive payments on reaching that age.

The recently amalgamated Limerick City and County Council will pay €565,000 in gross payments to former city and county council members.

Almost €300,000 will be shared among seven outgoing city councillors while eight former county councillors will receive €265,000 between them. These figures exclude payments to four former councillors which have not yet been calculated. A further five members’ payments have been preserved until they turn 50 and are not included in the figures.

Italy’s parliament gave final approval late yesterday to a package of support measures for the ailing economy, including a cut in energy costs for small companies and measures to spur lending to businesses.

The package, dubbed the “competitiveness decree” when it was presented by prime minister Matteo Renzi’s government in June, got a lukewarm reception from business leaders who said it lacked a clear strategy and failed to address the real needs of industry.

Mr Renzi is under growing pressure to take more decisive steps to overhaul the euro zone’s third-biggest economy after data this week showed it fell back into recession in the second quarter.

Chris Johns: Hints of economic recovery are turning into solid evidence. For a while now, various short-term indicators have been suggestive of something of a pick-up; forecasters are now moving from mere hints and suggestions to something more definitive, taking their cues from two main areas: the labour market and government borrowing.

Trying to parse things like the industrial production numbers is harder than usual thanks to huge swings in pharmaceutical output – but even here, the output of what is termed the “traditional” (and reasonably employment intensive) sectors of the economy looks to be healthy.

Irish Examiner

Kerry Group expects to make further acquisitions in the second half of the year and is continuing to review its UK consumer foods division, which could result in non-core asset disposals.

The Tralee-headquartered food and ingredients group said yesterday that it remained confident of meeting its previously-stated full-year targets of 6%-10% in adjusted earnings per share growth, despite seeing “significant headwinds” in the first half of the year.

The group’s half-year results — covering the six months to the end of June — yesterday showed broadly flat group revenues for the period, at just under €2.9bn. However, trading profit was up by 3%, on a year-on-year basis, at €274.7m and first-half post-tax profit soared by almost 66% to €194.7m.

Europe

Euro Topics: Global perspectives: An economic world war is coming: The world is on the brink of an economic world war, columnist Yuliya Latynina warns in the Russian anti-government newspaper Novaya Gazeta, and believes that above all the US and China will come out the winners: "I believe we're facing nothing less than the first economic world war, into which people across the world will be dragged by irresponsible, hostile acts. ... Instead of cannons this war will use sanctions, and - like cannons - these will wreak havoc on both sides. The most obvious danger is to Russia. ... China stands to benefit most from this global economic war, like all other countries that aren't caught up in it. And just like in past world wars, the US will benefit as well. On the one hand because the economic and banking systems there are in better shape than in Europe, and on the other because Russia's failures and the weakness of the EU will trigger a brain drain to America."

Italians must ensure their own recovery: Contrary to what many people think Italy's economic problems are not the fault of the government, the liberal daily La Stampa writes, and calls on Italians to do their bit: "It's time we admitted our guilt. We Italians are sitting in the dock. We're like our national football team in Brazil, resting on our laurels with dusty trophies on the shelf. But when the time comes to play we trip over our own feet and chalk up defeat after defeat. ... Reforms need neither visionary economists like Lord Keynes nor legendary politicians like F. D. Roosevelt. What they need is for people to accept the need for change with humility. Reforms mean paying the price today for something that will ensure our livelihood tomorrow. That takes courage and enthusiasm. Only when we're seized by a new sense of hope and courage can the reforms take place. Otherwise the recession - or decline, if you will - will be unstoppable and we will be trapped in a hysterical propaganda war."

Iraq must close ranks against Islamists: US President Barack Obama on Thursday night authorized targeted air strikes against the terrorist group Islamic State (IS) in Iraq. But above all the Iraqi leaders must take action against the advance of the jihadists, the Catholic daily La Croix argues: "After the disaster of the American intervention in Iraq in 2003, no country is willing to send ground troops to fight the IS. Should the UN step in? Such a mobilisation takes time. The fate of the religious minorities in Iraq lies primarily with the political leaders in Iraq. The rebels benefit from the deep internal divisions that block the working of institutions that have been weakened by years of war. To properly manage the country, it is now imperative to overcome the differences among the various communities."


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