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News : Irish Last Updated: Feb 19, 2013 - 8:43 AM


Tuesday Newspaper Review - Irish Business News and International Stories - - February 19, 2013
By Finfacts Team
Feb 19, 2013 - 8:38 AM

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The Irish Independent reports that AIB will contact all 33,000 mortgage holders who are in arrears by the summer with a view to having a deal worked out with them by the end of the year, the bank's head has promised.

CEO David Duffy said he was confident that they would be able to work out a deal with all willing customers and bring an end to mortgage misery for thousands of families across the country.

Speaking in Galway, where he is conducting a series of meetings with staff and customers, Mr Duffy did not rule out write-downs in some cases.

His comments came as the Government and the Central Bank are discussing moves to force the banks to tackle mortgage arrears.

But the discussions come amid claims that squeezed homeowners are being forced to go into arrears on their mortgages to get the banks to do a deal with them.

Families that have lost their income are unable to get the banks to engage with them unless they fall behind on payments, some experts claim.

Taoiseach Enda Kenny and Central Bank governor Patrick Honohan are understood to be frustrated at the banks' failure to deal with the arrears problem.

The failure is seen as a big impediment to the country's recovery and to economic growth.

But Mr Duffy said the primary target of his bank was to return to profitability by 2014.

"We have set up a programme whereby we would look to have discussed the restructuring with every single arrears customer by the summer. We would look to have closed out on most of those restructurings by the end of the year."

And the AIB chief maintained that the bank was increasing the amount lent each year.

He said that last year AIB achieved "€1.5bn of lending into the mortgage space versus our original target that we had set ourselves of €1bn".

Meanwhile, it emerged that some brokers were advising people to go into arrears deliberately in order to get a deal on their mortgage.

Repossessions

A Central Bank conference was told last week that the lack of repossessions and the protections from the mortgage arrears code were pushing people to stop paying.

And David Hall, of the Irish Mortgage Holders Organisation, a group that represents distressed borrowers, said banks still had no process in place to deal with people who were just about to default.

A spokesman for the Irish Banking Federation denied that banks were reluctant to deal with stressed homeowners.

But broker Karl Deeter said that, in practice, banks were only offering short-term deals, such as interest-only or payment holidays, to those already in arrears.

The Irish Independent also reports that ministers were faced with the prospect of angry emergency personnel taking industrial action as thousands turned out for a rally in Dublin against pay cuts.

The emotive gathering last night saw hundreds of nurses wearing T-shirts saying they would rather emigrate than take further wage cuts.

The protest also saw gardai ratchet up pressure on Justice Minister Alan Shatter as the force's supervisory ranks said they would support the rank-and-file's rolling campaign of action.

The move by the Association of Garda Sergeants and Inspectors will give a significant boost to the looming protests.

However, Garda Commissioner Martin Callinan warned his officers they could face disciplinary action if they went ahead with threatened pickets at Government Buildings.

Anger among the Frontline Alliance mounted as an estimated 4,000 of its members voiced their rejection of Government cuts at the meeting at the National Basketball Arena in Tallaght, Dublin.

Nurses, gardai, prison officers and firefighters said they were seen as easy targets, but had nothing else to give.

They heard rallying calls for those unions that are still engaged in talks to renegotiate the Croke Park Agreement to walk away and join in the protests.

The mid-ranking Association of Garda Sergeants and Inspectors was the first group to pull out of talks on cutting pay, but until now it has stayed silent on its plans.

However, general secretary John Redmond said the central executive would soon give the go-ahead for a campaign of action.

He told the Irish Independent that his members would not shy away from taking a stand.

It means garda supervisors will join rank-and-file members of the Garda Representative Association, who begin their own campaign this Friday.

Both associations had hundreds of members at last night's major rally of the 24/7 Frontline Alliance, which represents some 70,000 public sector workers.

PJ Stone, general secretary of the GRA, accused Taoiseach Enda Kenny of "threatening" frontline workers into accepting cuts to their allowances.

"We are threatened every day in the jobs that we do and we have never flinched," he said.

Seamus Murphy, deputy general secretary of the Psychiatric Nurses Association (PNA), said it was "incomprehensible" that other trade unions were "in cahoots" with the Government to break the original Croke Park deal, which secured public sector workers' pay and allow-ances.

He accused the Government of reneging on the original pay deal "with the complicity of the Irish Congress of Trade Unions".

Talks are continuing between management and unions on a new Croke Park deal, though the garda associations have pulled out.

It emerged last night that the Government wants to save €350m by striking an agreement on additional working hours.

Getting staff to work extra hours would enable the Government to speed up a planned reduction in staff numbers, according to IMPACT.

"As well as having the potential to accelerate the planned reduction in staffing, additional hours would lead to significant additional savings by reducing dependence on overtime, agency work and, possibly, contractors," said the statement.

Management is seeking the equivalent of an extra hour a day for all staff, but IMPACT has said it would not recommend a deal on this basis.

IMPACT believes the gap between unions and management on working hours will narrow. The issue is complex because of the wide variety of hours worked across the public service.

With the GRA and AGSI not engaged in the talks, the Garda Commissioner will tomorrow make a bid to convince them to stay within the rules before they embark on rolling action.

The AGSI is due to meet Mr Callinan at a special meeting at Garda HQ in the Phoenix Park tomorrow.

After those talks, the executive is due to meet to determine a campaign, which is expected to be launched next week.

Mr Callinan is also due to meet the leadership of the GRA separately tomorrow and is expected to tell them that picketing outside Government Buildings is a breach of disciplinary regulations.

Senior officers said the meeting was not intended to be a showdown between management and staff, and the commissioner will focus on his understanding of the financial difficulties they face as a result of the cutbacks.

GRA president John Parker said proposals to place pickets on buildings such as Leinster House would not constitute industrial action and would remain within the disciplinary code.

He said his members would act like "sandwich board men" while parading up and down and the protest would represent "mobile advertising" but it would not be used to prevent people coming and going from the buildings.

He said it could not be described as industrial action.

The Irish Times reports that the Government is holding firm in its plans to cut premium payments for frontline staff in the public service, despite a major protest last night involving thousands of nurses, gardaí, prison officers and fire and ambulance personnel.

Government sources said even after the proposed cuts, it would still be paying a significant premium payment to public service staff for working on a Sunday.

About 4,000 frontline staff took part in the rally against the Government’s proposals to reduce Sunday premium payments from double time to time and a half and to abolish special Saturday and “twilight” evening payments.

Union leaders at the rally urged frontline public service staff to lobby their TDs and senators and to warn them that it would never be forgotten if legislators supported such plans to cut the premium payments.

There was also strong criticism of union leaders involved in negotiating the proposed new extension to the Croke Park agreement, under which the Government is seeking to generate savings of €1 billion on its public service pay and pensions bill.

In a document released last night, management in the health service said that in the provision of services that operated round-the-clock every day of the year, the current costs for delivering of Sunday and public holiday services was “unsustainable”.

“Management do recognise that Sunday is an important day and are satisfied that the proposal to reduce the current rate from double time to time and a half is fair and reasonable in the current economic circumstances.”

Figures produced by health service management said at present it could “range from between €417 and €604 to pay a nurse for a 12-hour night shift on Sunday (depending on the point on the pay scale).

“In our proposals the costs of this would reduce to between €324 and €470. This still represents a significant premium payment.”

Management said the total costs of a 24-hour Sunday cover for a nurse could range from between €793 and €1,149 at the moment.

“In our proposals this would reduce to between €603 and €873. This still represents a significant premium payment.”

Management also argued that under its proposals doctors would still receive a significant premium payments for working on a Sunday.

“It can range from between €458 and €646 to pay a senior house officer for a 12- hour rostered Sunday (depending on the point on the pay scale). In our proposals the costs of this would reduce to between €344 and €484.

“It can range from between €712 and €897 to pay a specialist registrar for a 12-hour rostered Sunday(depending on the point on the pay scale). In our proposals the costs of this would reduce to between €534 and €673. This still represents a significant premium payment.”

At the rally last night, union leaders said the campaign against the premium pay cuts was only beginning.

Premium pay cuts 

They argued that the premium pay cuts, which are aimed at generating savings of around €170 million, would disproportionately hit frontline staff who received a significant percentage of their overall earnings in the form of premium payments for working at night or weekends.

The general secretary of the Prison Officers Association John Clinton told the rally that public representatives must realise that “there will be trouble ahead if an equitable solution is not found”.

The Irish Times also reports that Ireland’s new promissory note arrangement is a clear breach of the European Central Bank’s prohibition of monetary financing, the former ECB executive and chief economist Jürgen Stark has said.

Dr Stark’s disapproval follows fresh criticism from the Bundesbank in its monthly report yesterday that the deal underlined “increasingly stronger and more problematic inter-linkage between monetary and fiscal policy in the European monetary union”.

These arguments reflect a long-term fear of German monetary hawks that the ECB, in its efforts to assist in resolving the euro zone crisis, has broken its own rules, compromised its independence and made itself beholden to politicians.

Dr Stark said yesterday the arrangement with Ireland was a further demonstration of “the ECB’s new understanding of crisis management”. “The ECB’s contractual basis and core mandate shift further into the background,” he wrote yesterday in Die Welt daily.

Dr Stark resigned in protest at ECB bond-buying of crisis-hit euro states in 2011, following Bundesbank president Axel Weber out the door. Both have since been regular critics of the bank’s crisis strategy. “An independent central bank . . . cannot turn the prohibition of monetary financing into a bargaining chip,” Dr Stark said.

That had happened, he suggested, by allowing the Central Bank of Ireland to breach article 123 of the European Treaty forbidding monetary financing and transform into bonds the “legally dubious” Anglo Irish promissory notes.

The German economist said the ECB’s decision to “take note” of the decision implied state financing had taken place. The only logical consequence should be to push the Central Bank to sell off its bonds as soon as possible – which is the view of the Bundesbank.

The Irish Examiner reports that social networking giant Facebook is set to create 100 new jobs at its Irish operations; a move which will take its total employee numbers here to 500.

The firm’s Dublin base — which is its international headquarters — currently employs 400 people across numerous roles including advertising, sales, operations, policy, and safety.

The new jobs will cover a number of roles, including user operations, safety, and advertising.

In keeping with its usual policy, Facebook will be recruiting both in Ireland and internationally for the positions.

“These jobs, which reflect growth in markets across Europe but also the Middle-East and Africa — mean we will not only be recruiting from the local economy, but supporting local businesses by increasing our footprint,” Gareth Lambe, acting head of office for Facebook Ireland said yesterday.

“Ireland is a great hub of international tech talent, which is one reason why Facebook has its international headquarters in Dublin,” he said.

Facebook has had its Dublin base since 2008.

Interestingly, Paddy Power yesterday opened a book on who the next big technology multinational to make a significant Irish jobs announcement may be — citing another social media giant, Twitter — which opened its Irish office in 2011 — as favourite.

However, a spokesperson for IDA Ireland said the agency had no comment to make.

Jobs and Innovation Minister Richard Bruton said Facebook’s expansion here represents “a significant economic commitment” to Ireland on its part.

“Information and communications technology is a key sector targeted in the Government’s action plan for jobs, and we are determined to build on the major successes in this sector in recent years; in particular by supporting the further development of the thriving cluster around Dublin’s docklands,” he said.

IDA Ireland chief Barry O’Leary said social media “remains a key strategic industry for Ireland in terms of job creation”.

Yesterday saw further job announcements elsewhere.

Ireland’s first ‘cloud computing services brokerage’ firm, Cloud Compare, announced the creation of up to 12 new positions this year.

The company — which offers technical, sales, advice, and project management tools surrounding cloud computing — also has plans to expand further in Ireland, as well as into Britain.

Meanwhile, in Cookstown, Co Tyrone, sewage and waste water treatment company, CDEnviro announced a major expansion, which will create another 20 jobs at the firm.

Foreign news reviews and more comprehensive coverage of Irish news is available in our Daily News Digest in the Global category on Finfacts Premium.

Check out our subscription service, Finfacts Premium , at a low annual charge of €25 - - if you are a regular user of Finfacts, 50 euro cent a week is hardly a huge ask to support the service.


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