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News : International Last Updated: Jun 5, 2014 - 10:59 AM


Thursday Newspaper Review - Irish Business News and International Stories - - June 05, 2014
By Finfacts Team
Jun 5, 2014 - 8:15 AM

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London Independent's cartoon on Syria's presidential election via Twitter

Irish Independent

Health Minister James Reilly's days in the Cabinet are numbered after he was forced into a humiliating U-turn on medical cards.

Even ministerial colleagues now consider it only a matter of time before he will be moved out of the health portfolio, following the latest debacle.

Last night, Dr Reilly frankly admitted to Fine Gael TDs that the handling of the medical card issue had been a "disaster".

Responding to calls from his own backbenchers for him to be sacked – as reported in the Irish Independent this week – Dr Reilly said whoever was in health would have his full support.

Dr Reilly's entire health reform plan has been undermined after the Cabinet told him to come up with legislation to guarantee that people with serious illnesses would immediately quality for a medical card, regardless of their income level.

Outside the contact lens manufacturing facility in the heart of the IDA's sprawling industrial complex, the matter was being discussed in quiet whispers by fearful workers.

But in the heart of Waterford city the potential loss of 200 jobs was being loudly debated.

If hundreds of jobs were to go, and another 900 workers were to suffer deep pay cuts, then pubs, shops and cafes would be caught in the damaging ripple-effect.

Aisling Kelly from Tuckaway Coffee Shop, where people have been popping in for their famous scones for more than 33 years, voiced her concern.

"We're an industrial city and unfortunately we've lost an awful lot of money," she said.

"With Talk Talk going, the downfall from that was absolutely horrendous when that initially happened. The city basically came to a screeching halt."

The Finance Minister's break from his usual caution indicates that both government parties are actively seeking ways of winning back popularity after serious election reverses two weeks ago.

But the Government may have to set aside significant funding for the over-run in the health service, where spending is still out of control.

Continued Health Department spending is running over budget, with an excess of €144m so far. This remains a continuing source of concern and has again this week been criticised by the EU Commission.

But Exchequer returns yesterday eased some pressure as they showed tax returns €464m ahead of target for the first five months of the year.

Mr Noonan said the Government may be able to cut less than €2bn yet still keep the EU-IMF happy by bringing down the deficit to below demanded targets for 2015.

He signalled strongly that the Budget in October could cut less than the €2bn expected, given the positive tax return figures.

The European Central Bank is poised to impose negative interest rates on its overnight depositors, seeking to cajole banks into lending instead and to prevent the euro zone falling into Japan-like deflation.

At its meeting on Thursday, ECB policymakers may also launch a loan program for banks with strings attached to make sure the money actually gets out into the euro zone economy.

It will be the first of the "Big Four" central banks - ECB, Bank of England, Bank of Japan and U.S. Federal Reserve - to go the negative interest rate route, essentially charging banks to deposit with it.

Even though the risks are limited of the euro zone entering a spiral of falling prices, slowing growth and consumption, the ECB is increasingly concerned that persistently low inflation and weak bank lending could derail the recovery.

The economy grew just 0.2 percent in the first quarter, and euro zone annual inflation unexpectedly slowed to 0.5 percent in May, official data showed this week, piling additional pressure on the central bank to step in.

Irish Times

The Irish Embassy in Washington DC has contacted a US senator to raise concerns over his call for more than 1,100 at-risk jobs at a pharmaceutical giant in Waterford to be moved to New York.

The Irish Ambassador to the US confirmed in a letter to Fine Gael TD John Deasy yesterday that, following his request, the Embassy in Washington got in contact with the New York office of Democratic senator Charles Schumer.

This followed Mr Schumer’s call for jobs at Bausch + Lomb in Waterford – currently the subject of negotiations between management and unions – to be relocated to Rochester, New York, where the company also has an operation.

If Mario Draghi and his colleagues at the European Central Bank were unsure of the need for further easing of policy on euro zone interest rates, economic data over recent days will surely have confirmed them in their intent.

Eurostat yesterday confirmed that growth across the block was an anaemic 0.2 per cent in the first quarter – just half the relatively unchallenging 0.4 per cent analysts had expected. Year on year, the growth came to just 0.9 per cent.

And what growth there was stemmed mainly from Germany, with a little help from Ireland’s recovering economy. France stagnated and, in Italy, the Netherlands, Finland and Portugal, economic output fell.

Even in Germany, which recorded growth of 0.8 per cent in the first three months of the year, economists expect the pace to slow over coming months.

The upcoming budgetary process may turn out to be the most critical phase of the Coalition’s tenure in office.

Despite renewed pressure from Brussels to hold the line on austerity, it is pretty much accepted in political circles that another tough consolidation could sink the Government, or at the very least prompt Labour to walk.

In a rerun of the build-up to last year’s budget, Minister for Finance Michael Noonan has already begun signalling that the planned €2 billion adjustment required to achieve next year’s deficit target may not now be necessary.

Just how much he can eat into this €2 billion without crossing swords with Brussels remains to be seen, however .

On the basis of yesterday’s exchequer data, the Government had a surplus of €446 million at the end of May, derived from a combination of higher tax returns and further spending cuts.

Former Anglo Irish Bank chief executive David Drumm was trying to argue a “former CEO in bankruptcy defence” by blaming his advisers for his failure to disclose in sworn US bankruptcy statements €2 million in asset transfers to his wife, a lawyer for the bank has said.

John Hutchinson, attorney for the bank, now Irish Bank Resolution Corporation, told Judge Frank Bailey in closing statements on the sixth and final day of Mr Drumm’s bankruptcy trial in Boston that because the former banker had the means to hire advisers didn’t mean he could delegate responsibilities to them for making incorrect statements.

Mr Drumm was a former chief executive of a global bank with 16 years’ experience in banking and “as knowledgeable and sophisticated” a bankruptcy debtor as you would ever see, Mr Hutchinson said.

Irish Examiner

Providence Resources chief executive Tony O’Reilly Jr has hinted that the company is getting close to naming a farm-out partner for its highly anticipated Barryroe oil field in the Celtic Sea.

Speaking at the second annual Ireland Oil and Gas Summit in Dublin yesterday, Mr O’Reilly said Providence is in negotiations with interested parties.

The discussions are understood to be at a very detailed level, with first-phase production costs one of the specifics being negotiated.

Mr O’Reilly did not speculate on the timing of a deal, but did say that the matter is “the utmost focus of the company” and would be one of the very few such deals to be done this year.

Europe

Euro Topics: Kicking off a week-long trip to Europe, President Barack Obama announced in Warsaw on Wednesday that in view of the Ukraine crisis the US wants to set aside a billion dollars to boost its troops in Eastern Europe. The plans are an appropriate expression of solidarity with the Nato states, commentators say, while also criticising the passivity of the European allies.

Europe extremely reluctant to defend itself: Even if Obama says he wants to boost US military presence in Europe, Europe needs to understand that it also has to do its bit, according to the liberal Slovakian daily Sme: "Obama's announcement in Warsaw should be regarded as a symbolic gesture. There are no signs of any new strategy. A billion dollars is a lot of money but it's only a fraction of the US defence budget. ... The real problem is not that the US doesn't want to adequately protect its allies in Europe, but the fact that they themselves - with the exception of Poland - are not prepared to defend themselves. Why would the Americans want to invest in defending Europe if the European allies are not lifting a finger themselves? Why should the US protect countries who condemn Russian aggression while at the same time selling Russia weapons and blocking sanctions against Putin because that would mean making sacrifices themselves?"

US relying on symbols - like in West Berlin: The situation in Poland and the Baltic states is like that in West Berlin during the Cold War, the conservative German daily Die Welt comments: "Each of the anxious countries senses what the West Berliners also sensed before 1989: that in the event of war it would be difficult, if not impossible to defend them. ... As they did in Berlin once upon a time, the Americans are again relying on symbols. They make a stand in Poland and the Baltic region, without increasing the risk of war. ... This is a clever strategy, far-sighted and appropriate as regards solidarity with the Nato alliance. But it is also more: Barack Obama, who had planned to focus his country on the Pacific, is showing the Europeans that in spite of everything the United States is still a European power and will protect its allies. For the Europeans this doesn't mean they can rest on their laurels. It's embarrassing that the old Nato members, led by the Germans, still can't bring themselves to spend more on Europe's defence. If they continue like this the day will come when a US president turns his back on Europe in disgust. Then Europe will be left alone with Russia."

European elections: Cameron's undemocratic campaign against Juncker: British Prime Minister David Cameron's refusal to accept Jean-Claude Juncker as European Commission president is a slap in the face for Europe's voters, columnist John Palmer fumes in the left-liberal daily The Guardian: "Cameron wants to retain the utterly secretive and unaccountable system of haggling by EU leaders behind closed doors to fix who will lead the EU executive body. It is true that no one in Britain had a chance to vote for Juncker. ... But Juncker cannot be blamed for this. The British Conservatives withdrew from the EPP into a small group of their own and then refused to nominate a candidate who could have been put forward by the Tories to British voters. The hypocrisy manifest over this dispute sends the worst possible message to voters throughout the EU."

Drop in unemployment points to recovery: Spain's unemployment rate dropped again in May. According to figures published on Tuesday around 200,000 new jobs were created in that month alone. Indications are mounting that the economy is recovering as predicted, the left-liberal business paper Cinco Días comments in delight: "Month after month the regular statistics are making it increasingly clear that Spain has reached a turning point on the labour market, and a phase of growth is now beginning. ... Statistics show that the number of jobs in Spain is currently growing at a rate of 1.6 percent per year - one percent more than the economic growth, which is 0.5 percent per year. ... This is also the fourth month in a row in which the number of unemployed has decreased. The job market is not only moving, it is moving at a surprising pace."
 


© Copyright 2011 by Finfacts.com

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