Monday Newspaper Review - Irish Business News and International Stories - - October 20, 2014
By Finfacts Team
Oct 20, 2014 - 2:40 PM

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Irish Independent

A survey showing meaningful rises in house prices around the country should be welcomed as good news by most people.

The price rises do not point to a property bubble or the return of massively-inflated house prices.

They show that the market, outside of Dublin, for three-bed houses in particular, is finally coming to life.

This is good for those trapped in negative equity from the boom, who might be more optimistic of getting out of that trap a little sooner. It is good for the confidence of those who see some kind of rise in the value of their homes. It also reflects some sign of economic recovery being spread beyond the capital city.

Furthermore, when you look at the actual prices of houses involved, there is little sign that they reflect an unsustainable property bubble.

The Real Estate Alliance survey found that the average price of a three-bed semi in Co Cavan had shot up by 30pc since the start of the year. In Cork city it was up 28.2pc, while in Co Westmeath it was up 27.5pc. On the face of it, percentage gains like this might be seen as a worrying trend. But some important context needs to be put on it. Counties such as Cavan and Westmeath saw some of the biggest house price falls in the crash, because they were particularly overbuilt. So these prices are rising from incredibly low levels - well below the cost of building the house in many cases.

Bank of Ireland said SME lending is up nearly a fifth over the past nine months, in a hopeful sign for small businesses struggling to find credit.

The bank is the country's biggest lender to small and medium enterprises, with a market share (excluding property loans) of over 50pc.

There were encouraging signs that the Irish economy remains on a growth trajectory, the bank said.

The number of loans to small businesses dropped dramatically among all of the country's banks in the wake of the recession and have been slow to recover.

The bank is the country's biggest lender to small and medium enterprises, with a market share (excluding property loans) of over 50pc.

The European Central Bank (ECB) has begun buying so called covered bonds on the markets in a well flagged move to step up its looser monetary policy.

The ECB has started buying the bonds – debt secured on bundles of home loans – a spokesman said on Monday. French and Spanish binds are understood to be among the first securities acquired, but the programme is not targeted at specific countries.

The purchases are part of a policy announced the plan earlier in the month, its aimed at pumping cash into the ailing Euro area economy.

Irish Times

Irish water has defended its bonus payment scheme after it emerged that some senior managers at the company can earn a 19 per cent top-up on their salary .

The company’s wage structure includes a performance-related payment for staff and those rated “need improvement” are still entitled to a bonus of between 1.5 per cent and 9 per cent of their salary, depending on grade.

Senior management whose work “far exceeds expectations” will receive a 19 per cent bonus.

Irish and British workers employed by an Irish company in Qatar claim that their freedom to leave the Arab country is being restricted because of their employer’s policies. They have said they are also finding that their employer, the Sepam Group, which has its headquarters in Clonmel, Co Tipperary, will not give them certificates that are required by migrant workers under Qatari law if they are to work for other companies in the country.

A number of Irish and British construction and engineering professionals, who were working for Sepam but are currently unemployed, said they had job offers in Qatar which they could not take up because Sepam would not supply them with non-objection certificates (NOCs).
IBM is expected to announce today that it will pay Global foundries $1.5 billion to take an unprofitable chip-manufacturing unit off its hands.

IBM will also receive $200 million worth of assets, making the net value of the deal $1.3 billion, it is understood.

IBM put out a statement yesterday saying it planned to make a “major business announcement” today. After months of on-again, off-again talks, IBM chief executive officer Ginni Rometty finally struck a deal to jettison the chip making unit, which has been a drag on earnings.

Global foundries, owned by an investment arm of the government of Abu Dhabi, is taking on the unit to tap the expertise of its engineers in the fundamentals of semiconductor design and manufacturing.

Irish Examiner

Germany is likely to slip back into recession, putting the eurozone in jeopardy of contraction, a economic forecasting agency has said.

The London-based Centre for Economics and Business Research is predicting that after a brief spell of weak economic growth, the eurozone is perilously close to stagnating and falling back into contraction.

Its real GDP growth forecast for 2014 has been cut to 0.7% from 1.1% in July as the eurozone’s three biggest economies — Germany, France, and Italy — continue to struggle.


Euro Topics: At the end of their two-week synod in the Vatican, the Catholic bishops were unable to agree on a reform course regarding homosexuals and divorcees. The corresponding sections of the final document published on Saturday failed to achieve the necessary majority. The Church shouldn't be surprised to see more of its members turn their backs on it, some commentators criticise. Others praise Pope Francis for forcing the bishops towards greater openness.

The shepherds drive away their sheep: The bishops shouldn't be surprised if more people leave the Church as a result of its unchanging attitude to homosexuals and divorcees, columnist Stefano Hatfield writes in the left-liberal UK daily The Independent: "Religion risks becoming anachronistic for an entire generation. ... Whatever you think of the current Pope - at least he recognized that many in his modern-day congregation struggle with Catholicism's centuries-old prejudices, and was trying, unsuccessfully, to do something positive about it. That his bishops slapped him down helps explain that startling decline in the 'religious' in one action. Unless Britain's religious leaders listen to what remains of their flocks, they will continue to talk to each other in ever decreasing circles."

After the family synod failed to produce a majority for a reform course on homosexuality or divorcees who remarry, the conservative German daily Die Welt calls on the Catholic Church to give up the attempt to apply its teachings uniformly right down to the tiniest details all over the world: "The Catholic Church is universal. Its teachings must be the same everywhere - that's what distinguishes it from Protestantism. The concrete inferences for daily life necessarily have to vary from Manila to New York or Berlin's [alternative] Kreuzberg district. Rome could issue general guidelines within the framework of which the national bishops' conferences can find their own answers to the questions in their respective society. ... A two-speed, five-speed, umpteen-speed Catholicism runs the risk of division. No one knows that better than the pope, who personifies the Church's unity. And yet it was Francis who wanted the voting result of the synod to be made public."

Submarine hunt fuels Sweden's defence debate: The Swedish navy has been engaged in a major search off the coast of Stockholm since the start of the weekend, prompted by suspicions of a foreign underwater operation. Apparently an emergency signal sent from a Russian submarine was intercepted. The incident is likely to rekindle the debate over Sweden's defence, the tabloid Iltalehti believes: "The search in the islands off Stockholm brings to mind the hunt for submarines in the early 1980s. ... Of course we must react to border violations, but we must also retain a sense of proportion. ... In any case the submarine hunt will no doubt fuel debate on Sweden's defence, because a growing number of Swedes view the abolition of compulsory military service as a mistake. Furthermore power politics is still very much alive, even in Europe. And the leading guardian of morality [Sweden] cannot focus only on crisis management operations in distant regions. ... However the reintroduction of compulsory military service would be a very slow process."

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