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Tuesday Newspaper Review - Irish Business News and International Stories - - October 07, 2014
By Finfacts Team
Oct 7, 2014 - 1:23 PM
Irish Water has become embroiled in a new controversy after bizarrely claiming its staff are not going to be paid bonuses – just “performance related awards”.
The comments come in the wake of ex-junior environment minister Fergus O’Dowd’s criticism the company had “abjectly failed” in selling its message to consumers.
Mr O’Dowd spoke of his fears that it was becoming “another cosseted quango with a bonus culture” and his belief that disadvantaged groups are faced with having to pay more for water than they should.
In an unprecedented attack from a Government TD, Mr O’Dowd said: “Irish Water has come across as arrogant and uncaring, demanding money and demanding PPS numbers without properly explaining why all of this is necessary.”
One third of Irish Water staff are set to receive bonuses of 14pc or 15pc of salary.
The Central Bank outlined today new rules it is planning to put in place.
It will insist that banks only give out a tiny number of mortgages where the buyers have a deposit of less than 20pc of the value of the property.
Experts said this would mean that a deposit of 20pc will now become standard.
They added that the new rules could cool the over-heating Dublin property market, but will make it more difficult for first-time buyers to get a mortgage.
And banks, from next year, will also have to restrict the number of mortgages they issue where buyers use a high multiple of their income to work out how much they can borrow.
Facebook Inc closed its acquisition of mobile messaging service WhatsApp on Monday, with the final price tag rising an additional $3bn to roughly $22bn because of the increased value of Facebook's stock in recent months.
WhatsApp founder Jan Koum will receive nearly $2 billion in stock, vesting over a four-year period, as an inducement for him to stay with the company, according to a regulatory filing.
The acquisition, which Facebook announced in February and recently received regulatory approval in Europe, underscores the sky-rocketing values of fast-growing Internet startups, and the willingness of established players such as Facebook and Google Inc to pay out for them.
It’s an age-old political cliché: as soon as State coffers begin to fill up, the knee-jerk Government reaction is to dish out some gravy to the electorate in order to win votes.
The kite-flying to date from the Minister for Finance ahead of Budget day suggests there will be a move to ease the tax burden on middle and higher earners. It may come in the form of cutting the top rate of income tax by 1 per cent, or widening the tax bands to take more out of the higher tax bracket.
Either way, it will be a costly decision that may prove popular in the short-term – but could well prove short-sighted in the long-run.
A second day of weak German data sent European markets into retreat today with stocks, the euro and periphery euro zone government debt all knocked by the mounting evidence of an abrupt slowdown in the bloc’s economic engine room.
A day after German industrial orders saw their biggest monthly drop since the height of the global financial crisis in 2009, its industrial output figures for August plunged by 4.0 per cent, also the biggest fall in five years.
“Industrial production is currently going through a weak phase... but the current decline is exacerbated by holiday effects,” Germany’s economy ministry said in a statement. “All in all, one should expect weak production for the third quarter as a whole.”
Many people struggling with debt are still living below what is considered a reasonable living standard, according to the Insolvency Service of Ireland (ISI).
Research found many people are scrimping on food and prioritising bills but are too embarrassed to seek help - or don’t actually see themselves as insolvent.
Lorcan O’Connor, ISI director, said he met many people who didn’t actually realise they were insolvent and were committed to finding their own way out of debt.
He said: “They knew they were struggling, yet the last thing they wanted to do was to turn their back on their debts or seek help.
“We want these people to see that there is help available, that there’s no embarrassment in seeking it and no shame in taking it.”
The Government should continue to pay down debt and maintain budgetary discipline to ensure financial markets retain confidence in Ireland, according to Central Bank governor Patrick Honohan.
“Revenue from better- than-expected post-crisis asset sales in particular should be assigned to the extent possible to reducing the national debt. In the previous three years the seal of approval from the troika allowed the Government to take a longer time to bring the deficit under control,” said Mr Honohan in an address to the UCD Economics Society.
“Now financial markets, still a major determinant of Ireland’s borrowing costs, will look closely at budgetary trends and the Government will do well to convince them of its continued determination to adhere to the medium-term fiscal goals set out in EU law. This advice meshes indeed with the recommendations of the Irish Fiscal Advisory Council.”
Euro Topics: Only Hollande to blame for French debt: Above all French President François Hollande's economic policies are to blame for the country's miserable state, the conservative daily Le Figaro writes, calling on France to finally fulfill its European obligations: "The problem with France's position is that it doesn't convince anyone. And with good reason. Even if you bear in mind the difficult economic climate and judge France purely on the basis of its 'structural deficit', it remains beyond the pale. Of course one can quite rightly get annoyed at the schoolmasterly tone adopted by the Brussels technocrats and at Angela Merkel's eternal rebukes. But once you've signed treaties, taken on obligations and imposed immense sacrifices on others, there can be no wiggling out of your own responsibilities. And this, alas, is just what François Hollande has been doing for the past two and a half years. ... Not once since he was elected has France kept its word. ... This time will likely be one too many."
Italy should not follow France's example: Italy should not support France in its confrontation with the European Commission, the liberal-conservative daily Corriere della Sera warns: "Can we hope that the other EU member states and institutions will show us leniency if we side with France? We shouldn't fool ourselves. The answer is no. But if our national budget is rejected the temptation to openly challenge Brussels will be great: to reject any kind of fiscal discipline, follow France's example and not try to keep new debts under the three percent limit but to deliberately and substantially exceed that limit. For the Eurozone this could be the breaking point. For Italy - struggling under the burden of its huge debts - a painful phase on the financial markets would begin."
EU Parliament gives a lesson in democracy: The Cultural Committee of the EU Parliament spoke out on Monday in a majority decision against the Hungarian Tibor Navracsics as new Culture and Education Commissioner. Navracsics is controversial because he bore partial responsibility for a series of repressive laws while serving as Hungarian justice minister. The liberal daily La Libre Belgique praises the hearing as a democratic tour de force "which could serve as an example to the nation states. It's only reasonable for the MEPs to invite the future commissioners to a hearing so as to gauge their commitment to Europe, make sure of their independence and assess whether they are competent to head the portfolio that [EU Commission] President Juncker has assigned them. Bearing in mind the fully justified criticism of a lack of transparency in other areas, this is certainly a good thing. Nevertheless you can't help feeling that sometimes the Parliament has no idea where it should be heading. And that it's unsettled by its own power."
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