The European Central Bank (ECB) will charge banks in the eurozone
for keeping cash on deposit in an unprecedented bid to get money flowing and
tackle the threat of deflation.
ECB President Mario Draghi slashed the official interest rate – what banks pay
to borrow – to 0.15pc yesterday. More radically it introduced a "negative
interest rate" on overnight deposits from banks.
That means euro-area lenders, including banks here, will be punished for keeping
cash on deposit with the central bank instead of lending it out.
The central bank will charge lenders 0.1pc for parking funds overnight. Both
measures are aimed at keeping cash flowing through the "real economy".
Mr Draghi said interest rates will stay low for a prolonged period.
Irish entrepreneur Emmet O'Neill (35) and Brehon
Capital Partners have sealed the deal to buy five-star hotel and golf resort
Mount Juliet for an estimated €15m.
Billionaire Irish American businessman - Liberty
Global's John Malone - also ran the rule over the business which is based in
Thomastown, Co Kilkenny.
Mr O'Neill and joint partners Brehon have been in discussions to buy the golf
resort and spa for some time - Mount Juliet is being sold by the Mahony family,
which has owned it since 1987.
UCD commerce graduate Mr O'Neill sold his Smiles Dental business to UK group
Oasis Healthcare.Sources earlier this year for around £30m (€36m).
He founded the chain after a trip to teeth-whitening haven Florida.
Killeen Group, the Mahony family's holding company whose main interest is motor
business Toyota Ireland, confirmed earlier this year that it had placed the
Thomastown, Co Kilkenny property up for sale.
It includes a golf course designed by Jack Nicklaus.
A judge will rule later this month on whether the
State must reimburse all or some of the legal costs of former Anglo Irish Bank
chairman Sean FitzPatrick arising from his recent criminal trial.
Mr FitzPatrick was acquitted last March of
engaging in an illegal share support scheme.
His fellow Anglo directors Pat Whelan and William McAteer were convicted on 10
counts of providing illegal loans to the group of investors known as the Maple
Ten to prop up the Anglo share price.
Mr FitzPatrick's counsel, Michael O'Higgins SC, told a court yesterday that his
client was seeking the entire costs arising from the 48-day trial.
The defence team comprised of a two junior and one senior counsel as well a
Mr O'Higgins described the legal bill as "enormous" but did not specify a
Counsel asked where the justice would be "in letting Mr FitzPatrick leave the
courtroom with his pockets bulging with a huge legal bill".
Mr O'Higgins said the case against Mr FitzPatrick was based solely on his
answers in garda interviews.
Taoiseach Enda Kenny has rebuffed claims by Health Minister Dr
James Reilly that the Government lacked "political will" before the recent
election reverses to deal with the medical card crisis.
Speaking in the US, Mr Kenny said all government decisions were taken
collectively and involved every member of government – meaning Dr Reilly was
also involved in all medical card decisions.
The Taoiseach also said he had confidence in his Health Minister, in the same
way he had confidence in all ministers, but refused to say whether Dr Reilly
would be in the Cabinet after the forthcoming reshuffle.
The Taoiseach's comments came as Labour TDs and senators were last night enraged
by efforts from the embattled Health Minister to deflect blame for the medical
card debacle to the junior coalition partner.
Ireland is be investigated by the European
Commission amid allegations that the Revenue Commissioners have offered special
deals to multi-national companies.
Ireland is be investigated by the European Commission amid
allegations that the Revenue Commissioners have offered special deals to
The formal probe is to begin as early as next Wednesday and could result in
businesses being forced to repay money to the authorities.
However, Taoiseach Enda Kenny – who is on a trade mission in Silicon Valley –
has indicated that the Government will fight to defend its reputation on the
"We believe our legislation is robust, that the application of that legislation
is ethical and obviously we will be prepared to defend that very strongly in the
event of any further statement or requirement from the European Commission," he
told the Irish Independent.
The investigation comes amid worries that some agreements between tax officials
and US multinationals amount to state aid.
The Netherlands will also face a full probe, while Luxembourg may also be
The probe will examine whether the Revenue Commissioners have been too lax when
it comes to taxing some transactions known as transfer pricing.
Chris Johns: Unsurprisingly, recent statements from the European
Commission to the effect that further fiscal consolidation is necessary were not
well received. It is not just the Irish Government that has been sent a warning:
many other countries have been given reminder notices from Brussels.
Calls for yet more austerity emanating from the Belgian bubble should not have
come as a big shock, but the way in which the commission seems to have become
tone deaf when it comes to domestic politics is, on the face of it, remarkable.
The resounding raspberry sent Brussels way by a chunk of the European electorate
might have given thinner skinned civil servants pause for thought, but not the
Eurocrats. Austerity fatigue seems to have set in all over Europe’s periphery
but it has yet to reach its core.
Taoiseach Enda Kenny has said that the Government is
ready to defend Ireland’s tax regime “very strongly” if the European Commission
decides to investigate tax arrangements with international companies.
Speaking in California after meeting senior
executives at Apple, including chief executive Tim Cook, Mr Kenny said he
discussed with them “in a general way” Ireland’s “ongoing engagement” with the
“This applies not just in the case of Ireland but
across quite a number of countries and the information-gathering process that
has been under way has been fully endorsed by Ireland,” he said. “Clearly, when
the commission decide to make a statement about this, we will react to it.”
Mario Draghi’s latest cuts in interest rates are
virtually unprecedented. Danish and Swedish central banks have flirted with
similar moves but the European Central Bank’s decision to charge banks for the
right to park their spare cash in Frankfurt is the first time a major central
bank has attempted such a bold step.
For all of the so-called quantitative easing (QE)
undertaken by the Bank of Japan, US Federal Reserve and the Bank of England,
none has tried that particular trick. They have preferred to buy bonds issued by
their respective governments.
There are lots of reasons why the ECB won’t buy
European government bonds but, conceptually, the right way to think about this
gets to the core of the problem: there are no European government bonds to buy,
only German, French, Greek and 15 other separate sovereign bond markets. And
until there are proper euro bonds issued at the federal European level there
will be no orthodox QE from the ECB.
Banks are being urged to reduce the interest they charge on
variable-rate mortgages after the European Central Bank cut its main rate to an
historic low in an effort to boost the struggling euro zone economy.
The ECB reduced its main lending rate by 0.10 percentage points to 0.15 per cent
as its governors moved to charge commercial banks interest for holding money in
the ECB in an effort to stimulate bank lending.
Further steps include a scheme to increase the flow of lending to small and
medium-sized firms by as much as €400 billion. ECB president Mario Draghi told
reporters that the ECB has now reached the “lower bound” of interest rates but
he still left open the possibility of further measures to kick-start economic
The scale of the challenge facing ECB president Mario Draghi was underlined by
the latest set of growth forecasts for the eurozone.
The ECB expects GDP growth to average 1% this year; 1.7% in 2015 and 1.8% in
2016, although risks remain firmly to the downside. The inflation forecast is
equally grim. The inflation rate for this year is forecast at an anaemic 0.7%,
before rising to 1.1% next year and 1.4% in 2016, although again with risks to
In July 2012, Mr Draghi single handedly put into abeyance the crisis,
threatening to rip the eurozone apart when he said that he would do “whatever it
takes” to save the single currency. True to his word, he unveiled outright
monetary transactions the following month, which pledged to make unlimited
purchases of the debt of a member state in return for implementing structural
Euro Topics: The G7 states agreed on Wednesday in
Brussels to stiffen the economic sanctions against Russia if it fails to do more
to defuse the tensions in eastern Ukraine. With an eye to the joint
commemoration of the 70th anniversary of D-Day, commentators see good chances
for a détente and Russia's return to the negotiating table.
Moscow now sated and ready to negotiate: Now the time may have come for real
negotiations, the liberal Finnish daily Ilkka writes commenting on the G7
summit: "Even if Russia isn't taking part in the conference it hardly needs to
worry about it. Now that the country appears to have calmed down and Ukraine
isn't facing an immediate threat, the states of the West want to encourage
Russia to take a place at the table too. New sanctions are not deemed necessary
right now, and they couldn't be imposed without a negative economic impact for
all concerned. It's possible that the time for serious negotiations has come
because Russia has gotten all it could get. It won't give up Crimea any more,
and the West can't force it to do so. The Crimea operation also gave Russia the
opportunity to test how far it can go. It was able to get away with stealing a
big chunk of Ukraine like Crimea with relative impunity."
D-Day can be Diplomacy Day: A ceremony marking the 70th anniversary of the
Allies landing in occupied France will take place in Normandy on Friday,
attended by 19 heads of state and government. For the conservative French
daily Le Figaro this is a good opportunity to seek a diplomatic solution to the
Ukraine crisis: "Beyond matters of protocol, for the first time since the start
of the Ukraine crisis this event will bring together three main players who have
much to gain from frank discussions: the American and Russian presidents and
their newly elected Ukrainian colleague, Petro Poroshenko. The day of
commemoration will provide a chance to renew diplomatic efforts - and give
François Hollande the opportunity to don the apparel of chief diplomat which
France has left in the cloakroom since Nicolas Sarkozy. The French president has
followed Barack Obama's strategy of isolating Vladimir Putin. But it would be
wrong - and naive - to lend support to a Cold War scenario."
Wait for Putin and count on Obama: The heads of state and government at
the G7 summit have called on Russia to cooperate on resolving the Ukraine
conflict. In view of US President Barack Obama's assurances of support for
Eastern Europe on Tuesday, the left-liberal Slovenian daily Delo is optimistic
that the tense situation can be defused: "The leading powers are still waiting
for a signal from the Kremlin that Russia is ready to cooperate constructively
with Kiev and exert a positive influence on the pro-Russian separatists. Above
all people in the east of Europe, who are plagued by fears of Russia, had been
waiting for guarantees that in a worst-case scenario they will be protected from
Russian nationalism. So Obama's clear message was at least a symbolic relief for
Political standstill a respite for Greeks: The Greek government closed the
parliament for the summer holidays a month earlier than planned on Wednesday.
Prior to this surprise move the parliament had lifted the immunity of three MPs
from the neo-Nazi Chrysi Avgi party currently in police custody pending
investigations. For the web portal Protagon this break in political
activities seems like a merciful respite: "The parliament ended its work at a
time when some of its members are behind bars and others are on the verge of
beating each other up. It's like a curtain has been closed on a show where
everything has gone wrong. Or like a break in a farce with endless plot twists.
... Violent reactions dominate social interactions. What will we remember of the
parliamentary sessions which have now been abruptly ended? A climate full of
hatred and threats. ... Even when something creative was being discussed, it was
soon buried. The summer is coming to release us from this torment. In this
country we're happy when everything comes to a standstill."