The Irish Independent reports that the Teachers
Union of Ireland (TUI) has rejected the Croke Park II agreement by a margin of
more than four to one.
It is the first of the public service unions to deliver a ballot result and
there is no surprise that the membership went with the union's 'No',
The TUI executive will meet later this week to consider the outcome of the
ballot and the union's next steps will also be debated at its annual congress
As one of the smaller public service unions, the TUI result may not be key
when the results of all public service union ballots are aggregated next month.
However, the TUI has already decided that it will not be bound by the
majority decision of the Public Services Committee of the Irish Congress of
Trades Unions (ICTU).
"The TUI position is that it is not for the Public Services Committee to
determine working conditions for members of unions who have rejected the
proposals", said TUI president Gerry Craughwell.
The TUI said the ballot turnout of over two-thirds of the union's membership
was very high. Mr Craughwell said TUI members, both second-level teachers and
college lecturers, "have spoken and they have said enough is enough".
"The feedback we received from members during the ballot is that while the
pay proposals are a big issue for them, a further major issue is the savage and
unwarranted attack on working conditions."
Fianna Fail education spokesperson Charlie McConalogue said the fact that TUI
members felt they had no choice but to reject this agreement in such huge
numbers was extremely worrying.
"The Government needs to start putting far more energy into listening to the
concerns of public sector workers rather than just dismissing them outright," he
The Irish Independent also reports that it's no
secret. We're living longer but there are fewer people of working age to support
us in our increasingly lengthy retirements.
Last year, for every pensioner in Europe there were four people of working
age, on average.
Ireland, does better, with roughly five workers per retiree, according to
Eurostat – Europe's version of the CSO.
But the direction is all one way.
The combined population of the 27 countries in the European Union was
estimated at 503.7 million last year – up 6pc compared with 1992, according to
the latest data from Eurostat.
Over the same 20 years the share of those aged 65 years or older in the
population jumped from 14pc to 18pc.
Life expectancy across the EU is expected to shoot up by eight years for men,
who will live to the ripe age of 84.6 by 2060, while women will live by an
additional six-and-a-half years to 89.1.
It's one reason the European population is expected to surge, with Ireland
topping the table with a projected 46pc increase by 2060.
The certainty that populations are getting bigger and living longer creates
obvious knock-on pressures on states' social and health services.
In Ireland, the publication of the National Pensions Framework in March 2010
followed a major national debate on pensions.
The Government predicted that the ratio of workers to pensioners would
decrease to two workers for every pensioner in 2060 from six workers in 2010.
Jerry Moriarty, chief executive of the Irish Association of Pension Funds,
said a growing population puts increased pressure on the State's ability to fund
"When you've got a much smaller working population, you have a much smaller
tax base paying for a much higher pension base, and that's a concern," Mr
"As a country we started planning for that by putting the National Pensions
Reserve Fund in place, but obviously that has been pretty much all used to
recapitalise the banks now.
"So having been ahead of everybody else in planning for it, we're
now probably well behind."
The demands and costs of narrowing the ratio of those in retirement
and those in work are obvious.
The Government has responded to the pensions issue by raising the
retirement age – to 66 from next year, to 67 from 2021 and to 68 from 2028.
And Ireland isn't the only one. The UK pension age will jump from
65 to 68 by 2020, while Australia, the US and Germany are all set to
increase their pension age to 67.
But maintaining pensions is just one of the myriad of difficulties
posed by an ageing society that face governments across the world.
There are also implications for the public cost of rising health
and elderly care, and how to keep more elderly people who want to work in
"You've huge issues about catering for older workers and long-term
care. This is going to be a big issue," Mr Moriarty said.
The Irish Times reports that financial institutions have reacted strongly to
the Central Bank's risk proposals saying they will mean a significant increase
in levies; will put Ireland at a competitive disadvantage vis-à-vis other
financial centres; and could create “additional financial problems” for credit
the European Commission has confirmed that it hopes the
European Stability Mechanism fund will not be used for directly
As part of its consultation process on “Impact-Based Levies and Other
Levy-Related Matters”, the Central Bank invited regulated institutions to
respond to its proposals.
Risk-based supervision means that firms whose failure would pose most risk to
the economy or to consumers are subject to the highest levels of supervision and
that resources are allocated accordingly. It also means the riskier the
institution, the greater the contribution they must make to funding the Central
Bank. The impact-based levy is expected to apply from 2013.
While many respondents agree in principle with the Central Bank’s move to a
risk-based approach, some have questioned its framework of determining this,
PRISM (Probability Risk and Impact SysteM).
Bank of Ireland, for example, said an entity’s residual risk would be a “more
appropriate basis” for assessing the level of regulatory supervision.
Attracting more objections was the proposed increase in the cost of regulation,
with the Irish Insurance Federation putting potential increases as high as 300
In this respect Financial Services Ireland (FSI) said the approach risks
“influencing firm behaviour and business development”. It gave the example of a
cross-border life insurer currently deemed as “low risk” that would pay €27,086
a year; if it were to develop its business and move to a high risk category its
levy would increase by 500 per cent.
Industry also hit out at plans to introduce an application fee on firms seeking
authorisation, with FSI describing such an approach as “out of line” with those
in other jurisdictions.
The Irish Times also reports that
A spokesman said that while work is continuing on the
instrument, the commission hopes the deployment of the instrument won’t be
necessary. It confirms comments by chief of euro zone finance ministers Jeroen
Djisselbloem yesterday, which questioned whether the ESM bailout fund will ever
be used to rescue banks directly.
“We hope to be in a position where the deployment of such an instrument will not
be necessary,” the spokesman said. “[This] does not mean that an agreement on
such an instrument is not something that we continue to work towards, and work
on the instrument for the ESM which will allow for direct recapitalisation to be
an option available to us continues.”
The Government is hoping to deploy the ESM to help meet the
cost of rescuing Allied Irish Banks and Bank of Ireland.
Mr Dijsselbloem said in an interview on Monday he hoped the
ESM would not be used to directly recapitalise banks. “We should aim at a
situation where we will never need to even consider direct recapitalisation,” he
While European Central Bank officials moved to assure
investors that Cyprus would not be used as a “template” for future bailouts, the
commission said deposits over €100,000 could be used in future bail-ins. “Under
the current legislation for bank resolution . . . it is not excluded that
deposits over €100,000 could be instruments eligible for bail-in,” a spokeswoman
for EU internal markets commissioner Michel Barnier said.
Private sector losses, which were not implemented in the
Irish bank crisis, are likely to form a part of the new Europe-wide bank
resolution legislation, a key strand of the plans for banking unionworking their
way through the EU system. Progressing banking union legislation is a key
priority of the Irish presidency of the European Council. Irish officials
secured agreement on the single supervisor earlier this month, and focus is
turning to common legislation on banking resolution and deposit insurance,
though the forthcoming legislation is not likely to be implemented for some
Market reactions yesterday were mixed and the euro reached a
four-month low after ECB officials said that Cyprus was not a “template” for
future bailouts. “The experience of Cyprus isn’t a model for the rest of the
euro zone,” ECB executive board member Benoît Cœuré said. “All countries have
different problems – economic problems, problems of unemployment – but no
country has the same concentration of problems as Cyprus.”
The ECB is to continue providing emergency liquidity
assistance to Cypriot banks, which are due to reopen tomorrow, though its two
biggest, Bank of Cyprus and Laiki, face significant restructuring, with Laiki
set to be wound down.
As Cyprus’s banks remained closed yesterday, finance minister Michalis Sarris
said large depositors will faces losses of about 40 per cent on savings over and
Under the bailout deal agreed this week, deposits of less
than €100,000 will be protected. Deposits over this threshold in both the main
banks face losses, as deposits are used to recapitalise the bank in the case of
Bank of Cyprus, and to pay off debt in the case of Laiki.
Meanwhile, the chairman of Bank of Cyprus, which is to be
restructured and recapitalised, tendered his resignation. It was rejected by the
The Irish Examiner reports that Irish domestic banks continue to deleverage as deposits increased and loans
shrank over 2012, according to the latest Central Bank statistics.
In the years leading up to the implosion of the financial sector in 2008, Irish
banks had massively inflated loan-to-deposit ratios.
According to the terms of the bailout deal, the banks were ordered to reduce
these ratios from an average of 175% down to 122.5% by the end of 2013.
The latest figures show that mortgage lending was down 1.6% on the year to the
end of Dec 2012 and down 0.2% on the fourth quarter of last year, the 12th
quarterly decline in a row.
The outstanding amount of mortgage loans was €85bn at the end of December, while
the outstanding amount of securitised mortgages which continue to be serviced by
Irish banks was €41.8bn.
Tracker mortgages accounted for half of the outstanding mortgages at the end of
last year. These are mostly loss-making.
Fixed-rate mortgages only account for 9% of outstanding mortgages and half of
these are fixed for between one and three years.
The balance of outstanding mortgages are standard variable rate. There was
€19.6bn in buy-to-let mortgages at the end of December. There was a net decrease
of €104m in these types of mortgages over the fourth quarter of last year.
Personal lending accounted for €17bn of total lending at the end of last year,
which is 17% of all loans. Lending for personal consumption was down 10.6% for
the 12 months to the end of December and is down 25% from the end of 2009.
Deposits in Irish banks stood at €87bn at the end of December, which was 1%
higher than a year previous, although deposits fell by 0.2% during the last
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