The Irish Independent reports that Anglo Irish staff were told to remove any reference to the controversial Irish Life & Permanent (IL&P) deposits, worth €7.3bn in total, from their daily reports about the bank's funding position at the height of the financial crisis in September 2008.

The so-called 'circular deposits' are the leading area of investigation for gardai and the corporate enforcement watchdog Paul Appleby, both of whom are probing activities at Anglo in the second half of 2008. An email, seen by the Irish Independent, shows that a senior executive told another executive: "Do not include this name [IL&P] in the daily interbank excess report you distribute,'' the staff member was told. The email also referred to keeping information about IL&P within a tighter circle than usual.

Anglo, like other banks, prepares a daily report on inter-bank funding, which is distributed to a large number of key staff. The email is believed to be among evidence gathered by investigators probing how the deposits were organised and who signed off on them. The subsequent reporting of the deposits in the books of Anglo Irish Bank is also being closely scrutinised.

Thousands of emails and documents are believed to have been taken from Anglo by investigators.

The movement of loans by former chairman Sean FitzPatrick over an eight-year period and the placing of Anglo shares with a so-called 'golden circle' of investors, mainly developers, are secondary in the garda investigation, with the deposits the key strand of the probe.

The Financial Regulator in February 2009 described the transactions as "completely unacceptable'', but the role of the regulator itself is also being probed.

Objected

Documents have been published by newspapers indicating that the regulator may not have objected to the transactions, viewing them as part of a so-called 'green jersey' agenda.

Denis Casey, ex-chief executive of IL&P, has claimed that regulators were aware of the transactions that flattered Anglo results for the year ended September 2008.

In a now famous remark, Anglo Irish claims that when finance director Willie McAteer told the Financial Regulator Anglo was planning to "manage'' its balance sheet before year end, the regulator replied "fair play to you, Willie''.

The Financial Regulator, led at the time by Patrick Neary, has never commented on whether this remark was said or not. It has maintained throughout that it never approved of this type of transaction.

The Irish Independent also reports that unemployed people claiming the dole will be made to work in the community for their benefits under new government plans.

Social Protection Minister Eamon O Cuiv has revealed that the new measures could be enforced within months.

Under a pilot scheme, intially up to 10,000 unemployed people will receive €210 for 19.5 hours work every week by helping out with local after-school and childcare services, sports clubs, services for older people and environmental projects.

Those who fail to show up or miss hours will be struck off the dole under the plans.

The "social employment" scheme hopes to keep the 10,000 people in regular work as they search for a full-time job and a return to the labour market. If successful, the scheme could be extended to 40,000 people over the next two years.

It will initially be run for a trial period over the next four months. "Changing the way we approach our existing resources can unlock the potential of new ways to create locally-based jobs," Mr O Cuiv said.

"We must create a better future for people who find themselves without a job; to provide them with work activity in the short term, to up-skill them and give them opportunities to get back into the mainstream workforce as speedily as possible.

"Maintaining people's employability through regular work activity will be important for getting people back into the competitive economy."

The Government's work opportunity schemes -- which include the Community Services Programme and the Rural Social Scheme -- are set to expand from early autumn, when they are transferred from the Department of Community, Equality and Gaeltacht Affairs to Mr O Cuiv's office.

Between them, both schemes already give work opportunities to 5,300 individuals nationwide.

Mr O Cuiv believes the move will make a difference to services throughout the country.

"There are many needs in communities in terms of provision of after-school services, childcare, services for older people and environmental projects that we could continue to address through these schemes," he added.

"There is also the semi-economic sector, where we have heritage centres, tourist facilities and sports clubs that can generate some financial income, but that will always require some small state support from work schemes."

The Rural Social Scheme gives additional work and income to low-income farming and fishing families who provide essential community services, help development and maintain rural walkways and assist with tourism.

Meanwhile, funding supplied under the Community Services Programme gives employment opportunities to people with disabilities, the long-term unemployed, Travellers and recovering drug-users and ex-prisoners who get involved in activities for the elderly, for people with disabilities and recycling and environmental projects.

According to Mr O Cuiv, two out of every three unemployed people leave the live register within six months of signing on.

More than 71,000 people came off the register and went into employment in the six months from October 2009 to March 2010.

Emigrate

Moves to introduce a new community-based scheme come after Central Statistics Office figures revealed there were 68,600 unemployed graduates in March, compared with 25,400 at the same time in 2008.

The Economic and Social Research Institute recently warned that 200,000 people may be forced to emigrate between now and 2015 if unemployment is not addressed.

The Union of Students in Ireland said many of these would be highly-skilled graduates.

The Irish Times reports that the Green Party has changed its official policy position on Anglo Irish Bank and will now seek a “quicker wind-down” of the State-owned bank.

The party’s two Ministers, John Gormley and Eamon Ryan, are expected to tell Government colleagues at the Cabinet meeting on Wednesday that the Greens no longer support either of the options being proposed for Anglo Irish: a split into a good bank-bad bank; or the “orderly” wind-down of the institution.

A party source confirmed that the party has changed its stance and has adopted the position outlined by its finance spokesman Senator Dan Boyle in July that the bank be wound down in a shorter time than currently envisaged.

Mr Boyle has said that with the bank requiring €24 billion in State funding – and with no guarantee that the burden to the taxpayer would not rise further – there needed to be clarity and a definite decision on Anglo’s future.

Asked last night about the timing, he said it was not possible to be specific about the period, other than it would be shorter than the decade that is now envisaged.

“Under current policy, an orderly wind-down would take 10 years. The Greens believe it needs to be quicker than that. We are not saying, though, that it needs to be immediate,” he said.

The Greens’ change of policy comes as the bank prepares to report further substantial losses tomorrow – when Anglo publishes accounts for the first half of the year – and the need for further capital on top of the €14.3 billion already pledged to the bank.

Anglo had to take a writedown of €5.1 billion on €9.25 billion of loans, representing a discount of 55 per cent, sold in its first loan transfers to the National Asset Management Agency (Nama) in May.

The bank took a further write-down of €4.2 billion this month on €6.75 billion of loans sold in the second tranche of loan transfers to the State agency, representing a higher discount of 62 per cent.

The lower value assigned to Nama loans raised fears that the cost of Anglo could rise further.

While dismissing the recent estimate of ratings agency Standard Poor’s that the cost of Anglo could be €35 billion – €10 billion higher than the Government’s current estimate – Mr Boyle accepted that the final burden was unclear.

“We are talking about how long is a piece of string, or how deep is a hole? The Government policy was never going to be open-ended,” he said. Mr Boyle said the matter was likely to be discussed by Cabinet on Wednesday, as the bank was the “biggest draw on public resources”.

This was confirmed by a senior party source, who denied that the new position represented a reverse in policy on Anglo.

“The party has never been doctrinaire in its approach to this issue. The bottom line is that taxpayers’ money must be protected. We now believe their interest would be better served by a quicker wind-down,” said the source.

The official Government position is that it remains in talks with the European Commission and the European Central Bank on how to resolve the Anglo Irish crisis in a manner that will minimise the cost to the taxpayer.

The Department of Finance said two options were being explored - the proposal by Anglo management to split it into a good bank and bad bank, and the orderly wind-down that would take a decade.

The Irish Times also reports that more than 38,000 Irish companies are at a high risk of failure, while firms that have gone into liquidation this year have left more than €1 billion in unpaid debt, according to the business information website, Vision-Net.ie.

A study of about 100,000 companies has shown that 36 per cent are considered to run a high risk of failure, while 17 per cent are thought to be medium risk and 47 per cent are considered low risk. Some 1,123 companies that went into liquidation this year have left behind some €1.045 billion of unpaid debt.

The online business found a significant number of companies in the hospitality and restaurant sector had moved into the high-risk category.

Companies set up in the last decade face the greatest trading risk, the website found, while one-third of businesses fail between October and December.

“Our findings show the stark reality of what is happening in the real economy,” said Christine Cullen, managing director of Vision-Net.ie. “Our risk model is signalling that over 38,000 companies who appear to be normal are in fact in trouble. These companies are highly likely to be unable to meet their trading and financial commitments.”

Ms Cullen said that suppliers who were owed money by failed companies were “now left battling it out at creditors’ meetings fighting for a share”.

“If they are lucky, the likelihood is that they will only receive a small fraction of the money which is owed to them,” she said.

The company, which allows customers to view Companies Registration Office documents on its website, claimed that it had predicted eight out of 10 company liquidations.

A spokesman for the company said the firm based its financial analysis on company accounts, details provided at creditors’ meetings as well as information submitted in court filings and from the Central Statistics Office.

The Irish Examiner reports that Guinness manufacturer Diageo is considering backing a ban on selling alcohol below the cost of duty and VAT – but denied any link between price and problem drinking, it was reported today.

In its submission to the UK's Home Office consultation on a proposed overhaul of licensing laws, which closes next week, the maker of Johnnie Walker and Smirnoff said it would oppose any other kind of minimum pricing restriction, the Sunday Telegraph said.

Mark Baird, corporate social responsibility manager for Diageo UK, told the newspaper: “Our position has always been that we don’t believe there’s a relationship between price and alcohol harm, so we’re fully against minimum pricing.

“There’s a view that some alcohol sold at very low prices is damaging, so we believe the coalition’s proposal to look at sales below cost is worthy of further consideration.”

He added any support for such a limit would be “to address the public perception of alcohol rather than because we believe price is connected with alcohol-related harm.”

Some of Diageo’s competitors have argued that it could have the opposite effect on prices. Molson Coors, the US-Canadian brewing giant which makes Carling in the UK, said that it could drive prices even lower.

Nick Lakin, head of corporate responsibility at Molson Coors, said: “Extremely cheap alcohol prices are not good for society and we believe some form of pricing intervention may be required. Price point is important, we agree there is a connection between price and consumption.”

Molson Coors has met officials from the Home Office and the Treasury, which is holding a separate consultation on alcohol duty.

Asda has already pledged not to sell alcohol below the cost of duty and VAT and Tesco has backed a discussion on minimum pricing between retailers, the drinks industry and the British government.

As well as pricing, the UK's Home Office is examining opening hours and how to tackle loutish behaviour at closing time.

Toxic growth: Germany’s rebound is no cause for cheer  - - German critic Wolfgang Münchau says and he found the general price level in Germany to be a little over half of what it is in Belgium, Italy or Spain.  He says the improvement in Germany’s economic growth is driven not by productivity gains but by real devaluation.

Lingering clouds: Scientists confront climate uncertainty - -  Meanwhile, concentrations of airborne carbon increase year on year. Once carbon is in the atmosphere, it can stay there for a century, continuing its warming effect. The problem is that if action is delayed until these areas of uncertainty are resolved, the world may find it is too late.

Clive Crook: It falls to the Fed to fuel recovery -  -- The political problem is that US voters, ever wary of big government, have wrongly decided that the first stimulus was an expensive failure. The administration is partly to blame. It oversold the likely effects of the first package and, worse, made it part of a broader agenda of expanded federal power.

German banker in ‘Jewish gene’ dispute  -- Angela Merkel, chancellor, said last night she was ‘very sure’ the Bundesbank would talk about Thilo Sarrazin, a board member who said Muslims did not want to fit into German society and on Sunday suggested there was a Jewish gene.

Socialists ready to challenge Sarkozy - - The French party has vowed to become a ‘credible alternative’ to Nicolas Sarkozy, president, as it re-established its role as the principal opposition at its annual conference; The main talking point in La Rochelle was whether Dominique Strauss-Kahn, managing director of the International Monetary Fund, who was ensconced in Washington, would return to run for the presidency.

ECB likely to extend emergency bank support - - The European Central Bank is expected to extend emergency support for eurozone banks until early next year as it gauges how well the 16-country region might withstand a big US or global slowdown.

Warning on public sector job cuts - - Private sector cannot absorb redundancies, says agency;  With the government expected to slash 750,000 public sector jobs by 2015, Alistair Cox, chief executive of Hays, said: “It’s impossible to imagine the private sector is going to have the confidence to create enough jobs to absorb these people; and the private sector is the only place these people can go.”

BoJ holding emergency policy meeting - - The Nikkei leaps and government bond yields jump as Japan’s central bank holds an emergency meeting, bowing to government pressure to try to curb the strength of the yen.

Cluster of air crashes raises safety fears -- Attention has focused on flight safety after four fatal air crashes in the past two weeks lifted the number of significant deadly commercial airline accidents so far this year above that for the whole of 2009.

US consumers split into two camps - - An entire segment of consumers is splurging confidently on the finer things in life, while another, concerned about unemployment, spends only on necessities; Conventional wisdom holds that in a down economy, cash-strapped beer drinkers are likely to trade down for cheaper malt beverages, but that rule does not appear to be in effect in the US this year.

Bernanke Tries to Manage Expectations of Fed Role - - The Fed chairman, Ben S. Bernanke, has made it clear that the Fed cannot simply conjure up a recovery; So even as Mr. Bernanke outlined the Fed’s options and credited stimulus packages with helping the global recovery, he appeared to be tamping down expectations for a government-led fix. “For a sustained expansion to take hold, growth in private final demand — notably, consumer spending and business fixed investment — must ultimately take the lead,” he said.

China Fortifies State Businesses to Fuel Growth - - While China owes its rapid growth to private business, it is often the state’s companies that are on the march, in part because of state-bank financing and stimulus spending.

Risk-Taking Rises as Oil Rigs in Gulf Drill Deeper  -- As regulators investigate the causes of the Deepwater Horizon disaster, the broader dangers posed by the oil industry’s push into deeper waters have gone largely unscrutinized; The $3bn rig, called Perdido, can pump oil from dozens of wells nearly two miles under the sea while simultaneously drilling new ones.

The Billionaires Bankrolling the Tea Party  -- Frank Rich says the Koch brothers and Rupert Murdoch have self-interested agendas that go well beyond the interests of those who carry their banners; There’s just one element missing from these snapshots of America’s ostensibly spontaneous and leaderless populist uprising: the sugar daddies who are bankrolling it, and have been doing so since well before the “death panel” warm-up acts of last summer.

Families of Dead Soldiers Sue Insurer Over Its Handling of Survivors’ Benefits - - Prudential has been accused of profiting improperly from money intended for soldiers’ families; Prudential held the money in its own coffers and earned an investment profit estimated at 5 percent to 6 percent. Only when families wanted to withdraw funds would the company shuttle money into the Alliance Accounts, and then pay out the benefits with a markedly lower interest rate that varied from 0.5 to 1.5 percent, the suit says. Prudential has made an estimated half-billion dollars off this practice over the last 11 years, the plaintiffs’ lawyers say.

Technology Aside, Most People Still Decline to Be Located  -- Mostly the young are interested in letting others know their physical location. Others are reticent for safety reasons, or against providing too much information.