The Irish Independent reports that AIB chief Eugene Sheehy walked away with total pay and benefits of almost €900,000 last year even though the bank needed a €3.5bn bailout from taxpayers to survive.

Directors collected over €3.5m in salaries, pension payments and company car allowances in 2009, with Colm Doherty, who took over as managing director in November, paid €833,000 in pay, pension and other benefits as a director. Former chairman Dermot Gleeson, who was struck with eggs by angry shareholders last year, pocketed €203,000 before his retirement in the summer.

For the first time the bank is also revealing the extent of loans and credit card debts the directors and executives have with the bank. The bank also admitted that several divisions were paid bonuses in 2009, despite the bank's share price plunging and the bank announcing its first ever loss covering 2009. Bonuses were paid to staff at Polish subsidiary BZWBK and the bank's unit in the Channel Islands.

Bonuses were also triggered in the capital markets division for work done in 2008.

This division was led by Mr Doherty for most of 2009, but the bank has not paid these bonuses in Ireland to date, but they were paid to staff in other markets.

The threat of legal challenge forced the bank to pay the bonuses, said AIB.

Figures filed in the US show that some of the bank's executives held loans with the bank for as much as €4.4m during the year.

Decisions

Mr Sheehy paid off a loan worth €2.3m during the year and ex-chairman Dermot Gleeson had a loan of €1.7m as the year ended. Sheehy, who has been blamed for some of the poor lending decisions of recent years, collected a salary of €638,000, a pension contribution of €196,000, plus a company car benefit.

His total remuneration totalled €892,000.This was down on the €1.1m in 2009. Overall the pay and benefits in 2009 dropped to €3.5m from €5m in the previous year.

In an unprecedented move, Sean O'Driscoll, a non-executive director, waived his entire fees in 2009 and intends to waive them again this year until his retirement in April.

His decision was unique with some other non-executive directors picking up fees of up to €150,000. The current executive chairman of the bank, Dan O'Connor, was paid €156,000 in 2009. It is not known what he will be paid this year.

Neither of the government's two directors at the bank, Declan Collier and Dick Spring hold any shares in the institution, at least according to the period until December 2009.

The bank said that during 2009, it took determined action to reduce its remuneration spend and cost base in light of the financial crisis.

However, it conceded that pay increases of around 3pc were paid to staff, below manager level, following extensive negotiations with the Irish Bank Officials Association.

The Irish Independent begins an article on pensions with some lyrics: will you still need me, will you still feed me,

When I'm sixty-four?

It says many 40 year olds are probably too old to remember the lyrics, above, to the Beatles song 'When I'm Sixty-Four', but it came to mind in the past week when this newspaper revealed that the state pension age is to gradually rise to 68.

The State has decided that it will not feed us or need us until we reach 68, certainly in terms of paying us a pension.

Union official Fergus Whelan told the 'Today With Pat Kenny Show' on RTE radio this was akin to stealing three years' worth of pensions from people who have already paid for their state pension.

It is hard to find fault with that argument, even if you agree that the demographic situation means the State is facing a huge burden in terms of the numbers who will be over 65 in the years ahead.

The changes proposed by the Government mean that anyone under the age of 49 will have to keep working until they are 68.

Many people will be out of their job at 65, because that is the retirement age in their contract of employment, but not qualifying for a state pension for another three years.

The Department of Social and Family Affairs admits some people may fall through the cracks -- retired but not entitled to a state pension.

These people will end up having to apply for the likes of Jobseeker's Benefit or Jobseeker's Allowance, the department says.

The prospect of someone who has worked for 40 years and paid PRSI (Pay Related Social Insurance) all their working life having to claim the dole does not seem fair.

Also hard to swallow for middle earners is the planned cut in the tax relief for pension saving.

Relief

This is to fall from 41pc to 33pc. The fact that you can claim relief on PRSI and the health levy means the effective cost of €100 of a pension pot will rise from €51 to €59 for those on the higher rate of tax.

Director of taxation with Chartered Accountants Ireland Brian Keegan feels it is equitable to have lower- and higher-rate taxpayers getting the same level of tax relief.

One suspects that most middle earners could accept this if there had been some moves against the aggressive tax planning by "fat cats" included in the Government's pensions framework.

Proprietary company directors can still accumulate a tax-free pension fund of €5.4m, which hardly seems fair.

The Irish Times reports that the EU authorities are seeking power to set detailed guidelines for public sector pay in member states as they advance plans to create a European Monetary Fund (EMF) to prop up governments at risk of sovereign default.

As Chancellor Angela Merkel broke with German economic tradition to declare her support or the creation of such a fund, the European Commission made it clear that the plan would be accompanied by deeper surveillance over the public finances of member states.

The development follows months of pressure on the euro amid anxiety about the Greek budget deficit and the potential for contagion in the single currency zone.

It comes as high-level officials in key European institutions apply discreet pressure on Germany for moves to enhance the “credibility” of the euro system.

Although the precise parameters of an EMF plan remain subject to negotiation, the scheme would in essence create a lender of last resort within the EU. However, sources briefed on the discussions said assistance would come at a very steep cost to participating countries.

Still under discussion is the extent to which this can be done without breaching the no-bailout clause in EU law. While a spokesman for EU economics commissioner Olli Rehn declined to say whether the EU treaties would have to be changed to proceed with such a plan, other officials believe no change would be required.

However, Dr Merkel said treaty changes would be required.

“Such a fund cannot be created without treaty changes,” said Dr Merkel. “If the EU wants to remain capable of acting, it will keep encountering situations where the Lisbon Treaty cannot be the end of history.

“The EU has to be able to react to the challenges of the time,” she said. “We thought we wouldn’t need such a facility from the euro zone because we assumed that such a situation would not come to pass in the common currency area.”

Dr Merkel said yesterday in Berlin that the Greek crisis had changed her mind in favour of greater EU oversight of euro zone member states’ economies.

The European Commission is rapidly proceeding with a plan to advance the reach of its economic monitoring system. Informed sources said the EU executive was likely to demand a say in this process over public sector pay, a crucial but contentious component of public expenditure.

Dr Merkel said the time had come for euro zone members to agree to share greater financial data than at present to allow closer scrutiny from the EU statistics agency, Eurostat, as well as other euro zone members.

The reform measures are being prepared in a looming overhaul of the euro zone rulebook in an effort to prevent any repeat of the financial emergency in Greece.

German officials have complained about insufficient and incorrect information supplied by Greece to Eurostat, although Dr Merkel said yesterday her suggestions were not directed at Greece which, she said, had yet to ask for financial assistance.

The new measures would strengthen the co-ordination and surveillance of “budgetary discipline” in the single currency area.

While public pay cuts have proved highly controversial in Ireland, the sources pointed out that pay cuts adopted last week by the Greek government were introduced at the behest of the European authorities.

EU economics commissioner Olli Rehn, who says the Greek case illustrates the requirement for tougher economic supervision by the EU executive, will lean on a key clause in the Lisbon Treaty to revise the rules that govern the euro. The clause in question – article 136 – empowers EU governments to adopt “measures specific” to euro members “to set out economic policy guidelines for them”.

National governments have no veto in such cases to prevent the adoption of such measures.

“There is a clear opportunity in political terms to do this and do this now,” said a source briefed on the plan.

The commission’s decision to embark down this road follows threats by EU finance ministers to impose new austerity policies on Greece if the administration of prime minister George Papandreou did not adopt drastic new measures. Mr Papandreou yielded to such pressure last week, introducing new cutbacks and tax-raising measures last week.

The Irish Times also reports that a facility letter under which a €7.65 million loan was given to former Anglo Irish Bank CEO David Drumm in 2008 to buy bank shares had described the loan as a “non-recourse” loan, meaning the bank could only redeem the loan against the shares purchased, the Commercial Court was told yesterday.

Both Mr Drumm and the bank say this description was a “mistake” and the loan was actually a “recourse” loan.

The bank denies Mr Drumm’s claim that this acceptance by him was a factor in the parties allegedly reaching agreement to allow him a reasonable time to pay off the loan, and for the bank not to move against his family home or take legal action.

This acceptance by Mr Drumm was a “valuable benefit” to Anglo because, when it was nationalised in 2009, its shares were virtually worthless and the entire loan to Mr Drumm would have had to be written down if it was a “non-recourse” loan, his counsel Declan McGrath said yesterday.

Anglo denies it had given Mr Drumm any concession for his acceptance that the loan was a recourse loan.

The full hearing of Anglo’s proceedings against Mr Drumm for €8.3 million arising from the loan and interest is expected to take place later this year.

As well as opposing the bank’s claim for the €8.3 million, Mr Drumm has counterclaimed for €2.6 million over the termination of his employment and loss of bonuses.

Now living at Stage Neck Road, Chatham, Cape Cod, Mr Drumm has claimed in letters to Anglo that he has sufficient assets to meet his liabilities to the bank, and that its demand for immediate repayment is premature, in breach of loan agreements with him and amounts to harassment.

Mr Drumm has also claimed he and his wife Lorraine have given undertakings relating to their former family home in Malahide, which has been transferred into Mrs Drumm’s name in what Anglo alleges is a fraud on creditors, but the couple claim was for “taxation reasons”.

Yesterday, Mr Justice Peter Kelly was told Mr Drumm has agreed to discover documents evidencing his claim for mental distress arising from the bank’s actions. He will also discover all documents relating to the transfer of the family home.

Paul Sreenan, for Anglo, said it had agreed to discover a range of categories of documents, but argued documents sought relating to alleged contacts and negotiations between it and Mr Drumm over his loan extended over too long a time period.

After Anglo was taken over by the State, the bank’s lawyers and auditors were concerned at how the loan was to be treated in the bank’s annual accounts for 2008 as, at that time, there was much controversy about loans to other Anglo executives, including former chief executive Sean FitzPatrick.

The issue had delayed publication of the bank’s accounts.

It was agreed between the bank and Mr Drumm that the 2008 loan facility would be replaced by a 2009 “recourse” facility which did not include the “non-recourse language”. Mr Drumm had written to Anglo on January 28th, 2009 setting out his understanding of the agreement, but received no correspondence until June 2009.

Mr Drumm was later told by Eugene Murray of Anglo that its lawyers were reviewing its loans in light of a relationship framework agreement with the Minister for Finance. This was “a clear attempt” to negate the effect of the agreement between Anglo and Mr Drumm as to how his loans were to be treated, counsel said.

Mr Justice Kelly said he was satisfied there was “toing and froing” between Mr Drumm and Anglo from December to June 2009, and Mr Drumm was entitled to discovery of documents relating to such contacts, including phone contacts, up to July 1st, 2009 – not January 31st, 2009, as the bank had argued.

The judge also said Mr Drumm’s side could seek sworn replies from Anglo to questions relating to deferred bonus payments to employees leaving the bank between January 2005 and January 2010, and to payments in lieu of notice to senior executives over the same period. Mr McGrath said his side had the name of some persons who had received such payments.

Mr Drumm also sought documents related to his claim that his privacy rights were interfered with through alleged leaks by Anglo of his banking details to others, including the media. An Irish Times article of October 16th, 2009 referred to having seen bank records of Mr Drumm, counsel said.

Mr Justice Kelly directed Anglo to discover documents relating to any communications by it to the media between September 23rd and October 21st, 2009.

Mr Drumm was not entitled to discovery of communications between Anglo and the Department of Finance about accounts, as any such communications would have occurred when the State owned the bank, he added.

The Irish Examiner reports that two out of three first-time buyers surveyed are planning to buy a house by the end of the year, as speculation mounts that AIB could hike interest rates as early as this week.

Research from EBS indicates that despite the keen interest in purchasing houses from first-time buyers more than three-quarters are worried about job security.

This comes as AIB signals it is close to making an announcement that it would increase rates on standard variable rate home loans by as much as 0.5%. This would mean an extra €65 a month to repayments on a typical €250,000 home loan over 25 years.

The EBS research found that, of the first-time buyers looking to purchase, three in 10 are actively looking for their first home with most of the balance saying that they will be looking to buy before the year is out.

The survey also revealed that the average amount that prospective first-time buyers expect to spend on their new home is €260,000.

It has been projected that by the end of 2009 the net repayment for a first-time buyer, based on an average mortgage of €165,000, fell by €513 per month or 43% since July 2008.

Potential buyers are also shopping around for their mortgage, with people having contacted more than three different lenders on average.

Close to a third of respondents said that they were looking for a bigger house than they had originally planned or saying they were now looking in an area that previously would have been too expensive for them.

Men are more likely to be worried about job security, with 63% of men surveyed saying they were concerned against 42% of women.

Director of membership business at EBS Dara Deering said: "Ensuring first time buyers have confidence in the housing market and access to affordable, responsible finance are key issues that will contribute to our domestic economic recovery. It is good to see in this research that such a large portion of first-time buyers do believe that now is a good time to purchase, and this demonstrates their acknowledgement that the market will level out, with such steep declines in first-time buyer house prices most likely to be a thing of the past."

The research also found that those actively looking now are more likely to be male, Dublin-based, middle class and aged between 30 to 40 years. Also those who do not feel now is a good time to buy said that they were concerned that prices might fall further and for their own job security.

Chief executive of the Irish Brokers Association, Ciaran Phelan, said: "The good news is that the once unaffordable areas are now far more affordable and it should be noted that these areas will be the first to recover when the economy strengthens. It is important to always remind yourself there are three rules when it comes to purchasing property that should never be ignored and they are location, location and location."

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Merkel warns of hurdles in EMF plan - - German Chancellor Angela Merkel on Monday welcomed proposals for a so-called European Monetary Fund (EMF), that would aid a Eurozone member country at a time of economic crisis, similar to the role of the International Monetary Fund (IMF).

China needs time to build global car brand - - China's car output and sales volume in 2009 was 13.79 million and 13.64 million sets, up nearly 50 per cent. Statistics from China Association of Automobile Manufacturers (CAAM) show that in 2009, the total sales volume of local brand China's passenger cars was 4.58 million  units, accounting for 44% of total sales volume of passenger cars and up 4 percentage points from 2008.

Beijing remains divided over currency peg

Tax move by Brazil risks US trade war - - The Brazilian government has announced trade sanctions against a variety of American goods in retaliation for illegal US subsidies to cotton farmers.  The World Trade Organization (WTO) approved the sanctions in a rare move.

Brazil published a list of 100 US goods that would be subject to import tariffs in 30 days, unless the two governments reached a last-minute accord.  It said it regretted the sanctions, but that eight years of litigation had failed to produce a result.

PwC predicts more tax, less spend to cut debt- - Protecting some UK public services from spending cuts and capping tax increases means some department budgets will have to be cut by as much as 27%, Big 2 accounting firm PricewaterhouseCoopers warned on Monday.

The New York Times reports that President Obama challenged wavering members of his party on Monday not to give in to political fears about supporting health care legislation, asserting that the urgency of getting a bill through Congress should trump any concern about the consequences for Democrats in November.

In a high-octane appearance that harked back to his “yes we can” campaign days, Mr. Obama jettisoned the professorial demeanor that has cloaked many of his public pronouncements on the issue, instead making an emotional pitch for public support as he tries to push the legislation through a final series of votes in Congress in the next several weeks.

With the fate of his signature initiative on the line, and Republicans eager to portray Democrats as out of step with the country and incapable of governing, Mr. Obama seemed to relish the opportunity to cut loose and make his case on his terms, as he often has at pivotal moments.

And, with his back to the wall, the president appeared intent on reassuring his party that he was as confident as ever in his powers to explain, persuade and capture the politics of the moment.

Appearing before 1,800 students and other members of the public at Arcadia University, just outside Philadelphia, Mr. Obama cast himself almost as an outsider in Washington, expressing disdain for “the sport of politics” and saying the time for endless debates is over.

“They’ve warned us we may not win,” Mr. Obama said of his doubters and critics. “They’ve argued now is not the time for reform. It’s going to hurt your poll numbers. How is it going to affect Democrats in November? Don’t do it now.

“My question to them is: When is the right time? If not now, when? If not us, who?”

President Obama struck a populist tone, setting up the health insurance industry as his main target.

“We can’t have a system that works better for the insurance companies than it does for the American people,” he said.

Citing big rate increases for buyers of individual insurance policies in some states — 40 percent, 60 percent, even 100 percent — Mr. Obama sought to focus attention on provisions in the legislation that he said would protect consumers from the worst excesses of insurers, give people more choice among insurance policies, insure most people who do not have coverage, and put downward pressure on health care costs.

Boiling down his proposal to a few sentences, Mr. Obama asked, “How many people would like a proposal that holds insurance companies more accountable? How many people would like to give Americans the same insurance choices that members of Congress get? And how many would like a proposal that brings down costs for everyone? That’s our proposal.”

Mr. Obama also took direct aim at those who have warned that the health push could cost the Democrats their majority in the November elections. He alluded to letters he had received from cancer survivors and others who had been priced out of the health care market.

“What should I tell these Americans?” Mr. Obama said, to raucous cheering. “That Washington’s not sure how it will play in November? That we should walk away from this fight?”

Mr. Obama’s trip to Pennsylvania came as Democratic Congressional leaders raced to resolve the remaining differences between the House and Senate versions of the health care legislation and to draft formal legislative language that would allow for a new cost estimate by the Congressional Budget Office.

Without a final proposal and new cost figures, Democrats are in no position to start twisting the arms of wavering House Democrats whose votes would be crucial to adopting first the Senate-passed health care bill, and then a companion budget reconciliation measure that would include the final revisions.

As the White House and Congressional leaders continued to tinker, rank-and-file lawmakers found themselves under increasing pressure. Throughout Monday, Republicans sought to draw attention to the Democrats who are opposing the measure. They included Representatives Mike Ross of Arkansas and Artur Davis of Alabama, who is running for governor. Both Mr. Ross and Mr. Davis opposed the health care bill that passed the House in November. A spokesman for Mr. Ross, Brad Howard, said, “He is a ‘no’ at this time.”

Republicans also pointed to Representatives Daniel Lipinski of Illinois and Representative James L. Oberstar of Minnesota as examples of Democratic lawmakers who said they would oppose the health care legislation if it did not include tight restrictions on coverage for abortions.

Representative Bart Stupak, Democrat of Michigan, who sponsored an amendment that added the tighter abortion restrictions to the House’s bill in November, has said he will oppose the bill if those restrictions are replaced with the abortion language in the Senate bill. Democrats have concluded that they cannot make changes to the Senate abortion provisions using the budget reconciliation process and continued to search for some other compromise, perhaps with a third bill.

Over all, the Republican effort seemed intended to counteract a push by the White House and Democratic leaders to portray the passage of the health care measure as a political imperative for Democrats, and as a stark choice between success or failure that would shape their fate at the polls in November.

“We may be nearing the final act for this bill and the legislative process,” the Senate Republican leader, Mitch McConnell of Kentucky, said in a floor speech on Monday. “It’s just the beginning for those who support it. Americans don’t want this bill. They’re telling us to start over. The only people who don’t seem to be getting the message are Democrat leaders in Washington.”

Mr. Obama scoffed at Mr. McConnell’s warning.

“First of all, I generally wouldn’t take advice about what’s good for Democrats” from a Republican, Mr. Obama said to laughter in Pennsylvania. “But setting aside that, that’s not the issue here. The issue here is not the politics of it.”

Mr. Obama traveled to Pennsylvania with political allies, including Senators Bob Casey and Arlen Specter, both Democrats. On his return to Washington, Mr. Specter, who is involved in a primary battle, called Mr. Obama’s speech exactly the infusion of energy that the health package needed right now.

“That’s the most fiery I’ve seen him since the early campaign,” Mr. Specter told reporters traveling with the president.

On Wednesday, Mr. Obama is to travel to St. Louis for another campaign-style rally for health care, White House officials said. On Tuesday, the group Health Care for America Now plans a march in Washington in support of a health care package.

The NYT also reports that in a meeting at Google in 2004, the discussion turned to an e-mail message the company had received from a fan in South Korea. Sergey Brin, a Google founder, ran the message through an automatic translation service that the company had licensed.

The message said Google was a favorite search engine, but the result read: “The sliced raw fish shoes it wishes. Google green onion thing!”

Mr. Brin said Google ought to be able to do better. Six years later, its free Google Translate service handles 52 languages, more than any similar system, and people use it hundreds of millions of times a week to translate Web pages and other text.

“What you see on Google Translate is state of the art” in computer translations that are not limited to a particular subject area, said Alon Lavie, an associate research professor in the Language Technologies Institute at Carnegie Mellon University.

Google’s efforts to expand beyond searching the Web have met with mixed success. Its digital books project has been hung up in court, and the introduction of its social network, Buzz, raised privacy fears. The pattern suggests that it can sometimes misstep when it tries to challenge business traditions and cultural conventions.

But Google’s quick rise to the top echelons of the translation business is a reminder of what can happen when Google unleashes its brute-force computing power on complex problems.

The network of data centers that it built for Web searches may now be, when lashed together, the world’s largest computer. Google is using that machine to push the limits on translation technology. Last month, for example, it said it was working to combine its translation tool with image analysis, allowing a person to, say, take a cellphone photo of a menu in German and get an instant English translation.

“Machine translation is one of the best examples that shows Google’s strategic vision,” said Tim O’Reilly, founder and chief executive of the technology publisher O’Reilly Media. “It is not something that anyone else is taking very seriously. But Google understands something about data that nobody else understands, and it is willing to make the investments necessary to tackle these kinds of complex problems ahead of the market.”

Creating a translation machine has long been seen as one of the toughest challenges in artificial intelligence. For decades, computer scientists tried using a rules-based approach — teaching the computer the linguistic rules of two languages and giving it the necessary dictionaries.

But in the mid-1990s, researchers began favoring a so-called statistical approach. They found that if they fed the computer thousands or millions of passages and their human-generated translations, it could learn to make accurate guesses about how to translate new texts.

It turns out that this technique, which requires huge amounts of data and lots of computing horsepower, is right up Google’s alley.

“Our infrastructure is very well-suited to this,” Vic Gundotra, a vice president for engineering at Google, said. “We can take approaches that others can’t even dream of.”

Automated translation systems are far from perfect, and even Google’s will not put human translators out of a job anytime soon. Experts say it is exceedingly difficult for a computer to break a sentence into parts, then translate and reassemble them.

But Google’s service is good enough to convey the essence of a news article, and it has become a quick source for translations for millions of people. “If you need a rough-and-ready translation, it’s the place to go,” said Philip Resnik, a machine translation expert and associate professor of linguistics at the University of Maryland, College Park.

Like its rivals in the field, most notably Microsoft and I.B.M., Google has fed its translation engine with transcripts of United Nations proceedings, which are translated by humans into six languages, and those of the European Parliament, which are translated into 23. This raw material is used to train systems for the most common languages.

But Google has scoured the text of the Web, as well as data from its book scanning project and other sources, to move beyond those languages. For more obscure languages, it has released a “tool kit” that helps users with translations and then adds those texts to its database.

Google’s offering could put a dent in sales of corporate translation software from companies like I.B.M. But automated translation is never likely to be a big moneymaker, at least not by the standards of Google’s advertising business. Still, Google’s efforts could pay off in several ways.

Because Google’s ads are ubiquitous online, anything that makes it easier for people to use the Web benefits the company. And the system could lead to interesting new applications. Last week, the company said it would use speech recognition to generate captions for English-language YouTube videos, which could then be translated into 50 other languages.

“This technology can make the language barrier go away,” said Franz Och, a principal scientist at Google who leads the company’s machine translation team. “It would allow anyone to communicate with anyone else.”

Mr. Och, a German researcher who previously worked at the University of Southern California, said he was initially reluctant to join Google, fearing it would treat translation as a side project. Larry Page, Google’s other founder, called to reassure him.

“He basically said that this is something that is very important for Google,” Mr. Och recalled recently. Mr. Och signed on in 2004 and was soon able to put Mr. Page’s promise to the test.

While many translation systems like Google’s use up to a billion words of text to create a model of a language, Google went much bigger: a few hundred billion English words. “The models become better and better the more text you process,” Mr. Och said.

The effort paid off. A year later, Google won a government-run competition that tests sophisticated translation systems.

Google has used a similar approach — immense computing power, heaps of data and statistics — to tackle other complex problems. In 2007, for example, it began offering 800-GOOG-411, a free directory assistance service that interprets spoken requests. It allowed Google to collect the voices of millions of people so it could get better at recognizing spoken English.

A year later, Google released a search-by-voice system that was as good as those that took other companies years to build.

And late last year, Google introduced a service called Goggles that analyzes cellphone photos, matching them to a database of more than a billion online images, including photos of streets taken for its Street View service.

Mr. Och acknowledged that Google’s translation system still needed improvement, but he said it was getting better fast. “The current quality improvement curve is still pretty steep,” he said.