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Friday Newspaper Review - Irish Business News and International Stories - - September 26, 2014
By Finfacts Team
Sep 26, 2014 - 11:02 AM
The fallout from the cronyism controversy continues to grow, with pressure mounting on Taoiseach Enda Kenny and new Arts Minister Heather Humphreys.
Mr McNulty farcically resigned from the board of the Irish Museum of Modern Arts (IMMA) just 13 days after he was appointed, to bolster a run in the upcoming Seanad by-election.
And amid mounting anger over the affair, one of three female candidates overlooked for the Seanad nomination quit Fine Gael, saying: "It should have been a woman".
Tanaiste Joan Burton has insisted she is not pre-empting the findings of a Government review on rent supports for struggling households.
Ms Burton said earlier this week she was not in favour of increases to rent supplements as she believed they would only inflate the rental market and impact on lower income workers and students.
The comments were interpreted by homelessness campaigner Fr Peter McVerry as a sign Ms Burton had already made up her mind on the outcome of the review, which is examining whether increased supports are needed in some parts of the country.
However, last night the Social Protection Minister insisted she had yet to rule increases in or out.
Irish company Fyffes and US firm Chiquita are to revise terms of their merger.
The US company is to increase ownership from 59.6pc from 50.7pc in their $526m tie-up.
In a statement, the two firms said that that Fyffes shareholders are now expected to own approximately 40.4% of the proposed merged ChiquitaFyffes.
The proposed merger will see the company then having a 14pc of the $7bn global banana market.
In a statement, the companies said they "have also agreed to increase the termination fee payable to Fyffes from 1pc to a more customary 3.5pc of the total value of the issued share capital of Chiquita should the combination be terminated under certain specified circumstances as detailed in the amended agreement.
Minister for Finance Michael Noonan has upgraded his growth forecast for the economy for the third time in three weeks as well as signalling the current capital gains tax exemption for property investors would be removed in next month’s budget.
Mr Noonan said Ministers were now finalising their budgetary plans on the basis of 4.7 per cent growth in gross domestic product (GDP) this year, which would be the highest annual growth rate recorded in seven years
The forecast is higher than the 4.5 per cent growth he predicted just last week, following a string of positive economic indicators, and well above the 3.5 per cent he forecast earlier this month on the back of better-than-expected tax returns in August.
The Fiscal Council can hardly have expected garlands for dishing out smelling salts over the budget – the body was not set up to court popularity. And true, the prospect was never likely that the Coalition would ditch plans for a softer budget on foot of its intervention. But as growth accelerates and the clamour for cuts in income tax intensifies, it is as well to note that abundant vulnerabilities remain.
There was some back-sniping at the council in Government circles, but nothing too heavy. One critic charged that the body had got it wrong before, calling for a €3.1 billion retrenchment this year when the deficit target will be comfortably met with the €2.5 billion budget adjustment last October.
‘Boy cries wolf’
Another said too many “boy cries wolf” warnings from the council would undermine its authority in the event that political leaders really were set to run the economy off the rails.
The Government stands to realise an unexpected financial gain next year from moves by the Central Bank to accelerate the disposal of debts built up by the defunct Anglo Irish Bank.
The Central Bank has taken steps in recent months to speed up the rate at which it sells off €25 billion in government bonds it has held since the deal last year to scrap the Anglo promissory note scheme.
The bonds are being sold to private investors at a profit, and a large portion of the money realised will eventually end up in the exchequer, it is understood.
Bank of England governor, Mark Carney said the judgment on when to increase the benchmark rate from a record low has become "more balanced" in recent months.
The UK is poised for the fastest growth in the G7 this year and BoE policy makers are weighing when to begin removing emergency stimulus measures. While some members of the Monetary Policy Committee (MPC) have started to push for a rate increase, the governor has voted with the majority, citing weak wages and anaemic growth in Europe as reasons to keep borrowing at 0.5%.
“With many of the conditions for the economy to normalise now met, the point at which interest rates also begin to normalise is getting closer,” Mr Carney said in a speech yesterday in Newport, Wales. “While there is always uncertainty about the future, you can expect interest rates to begin to increase.”
Speaking to a conference of actuaries, the governor also said the BoE would step up oversight of people in the insurance industry and will begin consulting on that this year.
Euro Topics: Finland's PM makes ministers of his friends: Following the withdrawal of the Greens from Finland's governing coalition, the conservative Prime Minister Alexander Stubb named his former press attaché Sanni Grahn-Laasonen as new environment minister. That reeks of cronyism, the liberal Finnish daily Ilkka complains: "It seems your political career takes off all the sooner the closer you are to the party leader. Old friends are not forgotten when the time for divvying up the posts comes around. With just a few months to go the minister can't do much good - or harm, luckily - in the environment ministry. She can earn herself a little respect and get a good head start for the elections [in six months]. ... But really, Stubb could have done someone other than his former press attaché this favour."
New EU Commission must be closely examined: The new European Commission-designate will face the questions of the European Parliament starting Monday. Two awkward issues need to be clarified in this process, the liberal Italian business paper Il Sole 24 Ore explains: "The first issue concerns the veto rights of the seven vice presidents regarding the initiatives of the commissioners, who are subject to the vice presidents' supervision. Are these real restrictions on the commissioners' powers, or just fake? ... The second awkward issue concerns the 300 billion euro stimulus programme announced by [Commission President-designate] Juncker in July in the EU Parliament. Is this fresh money or cash to be taken out of existing EIB [European Investment Bank] funds and the EU budget? If the latter is the case, where is this supposed to come from in a Europe where the member states are short of cash and those who have money, like Germany, are the last ones willing to invest in European projects?"
For Roula Khalaf Sunnis are the forgotten victims in Mid East: The IS militias' acts of aggression against Kurds, Yazidis and Christians in Syria and Iraq have led to US airstrikes, but it's the Sunnis living in the region who suffer the most, writes columnist Roula Khalaf in the business daily The Financial Times: "Even as we cheer the protection of minorities and of what remains of the multicultural fabric of the Middle East, we often lose sight of the majority. ... The Arab majority I am referring to are the Sunni, and the truth is that the members of this branch of Islam have suffered more than most in recent years. Just look at Syria, where a brutal, minority-based regime has been on a killing spree for more than three years against a largely Sunni uprising. Or consider Iraq, where the Sunni are fewer than the Shia Muslims but have felt ignored and dispossessed since the 2003 ousting of the Ba'athist regime. Many Syrians watched this week's US-led air strikes with bewilderment because no American rushed to save them from the government's chemical weapons and barrel bombs."
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