The Irish Independent
THE Government could take in up to €500m this year from the
programme to sell state assets including parts of the ESB and Bord Gais,
according to the European Commission.
That compares to €110m that was built into the Budget, the Brussels-based body
But in its first post-bailout progress report, the Commission said it has been
given no guidance to date on how much of the cash will be used to pay off debt,
despite an agreement by the Government to split the cash with lenders.
"There has been no indication what proceeds from the sale of state assets would
be used for debt reduction, a commitment under the former EU-IMF programme," the
Bord Gáis's energy division and parts of the ESB are among the so-called "family
silver" state assets put up for sale as part of the deal with the troika.
THE broadband landscape in Ireland is changing very quickly, as
the latest figures from the Irish telecoms regulator show. The rise of Sky has
disrupted a large chunk of the market, while regional wireless broadband
operators are starting to struggle. Here is what has happened and why.
1. Sky has grabbed 6pc of the Irish fixed broadband market in under 12 months.
The satellite operator has taken market share off everyone bar UPC, but is
hitting Eircom hardest. This is not surprising, as the service runs over Eircom
telephone lines, making it an easy replacement option. Sky has well over 500,000
television subscribers. This figure far exceeds UPC's 330,000 digital television
customers, although UPC's network footprint is smaller than Sky's. With this
kind of market impact, Sky should logically be contemplating a mobile operation
here. But the company has not yet announced any intention to go down this road.
2. 'Wireless' and satellite broadband operators are getting squeezed out.
In small towns and villages, the only broadband operator available is often one
that mounts equipment on your roof and operates on 'line of sight' with a mast
somewhere in the vicinity. Where even this service isn't available, a satellite
option – stick a satellite in your garden or on your roof – is sometimes used.
Those players are starting to fade, probably because Eircom is slowly improving
its rural network.
Medtronic chief executive Omar Ishrak has been busy laying on the
PR in the company's home state of Minnesota as the firm seeks to push its
planned $43bn (€31.6bn) acquisition of Covidien over the line.
Covidien is a US firm with its tax base in Ireland. Medtronic will move the
enlarged group's tax base to Ireland, helping it to save millions of dollars a
year. It's the latest move by a US business to lower its tax bill by basing
itself in Ireland.
Obviously the heat has been getting to Mr Ishrak, who felt compelled (or, at
least his media gurus did) to write the newspaper piece.
"Some people have misinterpreted the recent announcement that we are acquiring
an Irish company and declaring our principal executives' offices in that country
to mean that we are leaving Minnesota," he wrote in the 'Minneapolis Star
"Nothing could be further from the truth. The Medtronic operating headquarters
where I go to work every day will stay right where it is in Fridley."
He added: "The Covidien deal expands our mission, but job growth and innovation
will continue here."
The Irish Times
A budget adjustment of just €800 million would be enough to hit
next year’s deficit target of 3 per cent, the Nevin Economic Research Institute
In its latest quarterly outlook, the trade union-backed think tank said
improving economic conditions would enable the Government to implement budgetary
cuts of less than the previously-predicted €2 billion.
This contradicts the independent Fiscal Advisory Council, as well as the IMF and
the European Commission, all of which have urged the Government to stick to the
€2 billion target.
The institute warned that another tough budgetary consolidation risked
depressing domestic demand even further, which would delay economic recovery.
Not far from the London offices of the Financial Times was the
Marshalsea prison where debtors were sent. In the 18th century, more than half
of London’s prisoners were incarcerated for undischarged debt. The moral hazard
Taliban of the day insisted that such harsh penalties were necessary. Then, in
1869, imprisonment for debt was abolished and bankruptcy introduced. Both
economy and society survived.
Things sometimes go wrong. Sometimes due to bad luck and sometimes
irresponsibility. But society needs a way to allow people to start over again.
This is why we have bankruptcy. Indeed, we allow the most important private
actors in our economies – companies – to enjoy limited liability. This lets
shareholders walk away from their companies’ debts unscathed. That idea, too,
was condemned as a licence for irresponsibility when introduced. Limited
liability does bring problems, notably in highly leveraged businesses (such as
banking). The ease with which US corporations can walk away from their creditors
is breathtaking. But this is better than unlimited liability.
On the face of it, the idea that Eircom might once again list on
the stock market seems ridiculous. In recent months, it has appointed a clatter
of corporate advisers to advise it on its strategic options. Top of the list
appears to be flotation, with reports it is planning a dual listing in Dublin
and London in September with a view to raising €1 billion, which would be used
to pay down its debt.
Just two years ago Eircom was banjaxed financially after Singapore-based
investment group STT decided there were greener fields to plough elsewhere and
walked away from its modest equity investment to leave the company’s
bondholders, who were owed €4.08 billion, to decide its fate.
The Central Bank has asked the High Court to strike out legal
claims against it which could make it liable for hundreds of million of euro in
losses. The claim relates to the regulator’s allegedly approving the alleged
unlawful delegation to former Irish Nationwide chief executive Michael Fingleton
of the powers of the building society’s board.
John Stanley Purcell is one of four former directors of Irish Nationwide (INBS)
being sued, separately from Mr Fingleton, by State-owned Irish Bank Resolution
Corporation (IBRC) over “catastrophic” losses of some €6 billion at the society
between 2008 and 2010.
Mr Purcell denies the claims against him and is claiming entitlement to a
contribution and indemnity from the Central Bank should IBRC win its case.
He claims the Central Bank and Financial Regulator knew of the alleged
delegation of board powers over 12 years between 1997 to 2009 to Mr Fingleton.
The Irish Examiner
The scale of the setback for both Government parties in the local and European
elections is proportionate to the chances of €2bn in budget cuts being
implemented next October.
The ESRI, Ibec, and now the Nevin Economic Research Institute, are among the
bodies urging the Government to ease up on consolidation.
Finance Minister Michael Noonan has signalled that he will wait until the end of
the summer when there is much greater clarity on tax receipts and economic
growth before making any decision.
However, the minister has said on a number of occasions, if the budgetary
arithmetic stacks up, he would like to provide tax relief for middle-income
Joan Burton and Alex White are battling it out for leadership of the Labour
Party. Whoever wins will try and gain as many concessions as possible for
traditional Labour policies.
Euro Topics: Even small affairs rock
Poland: The Polish government has discussed the consequences of the latest
publication of secret recordings in the Wprost scandal. The whole affair puts
the state in a very bad light, the news magazine Newsweek Polska comments:
"Four years ago [at the time of the Smolensk disaster] we already saw how
irresponsible behaviour and ineptitude led to the death of our president and
rocked our state. And now we are once again seeing how easy it is to shake this
state. This is as sad as it is worrying. All it takes is a good bugging expert.
He or his client decides whose conversations should be bugged. And he
effectively decides what we learn and when. And our intelligence services, of
which there are more than 20, haven't got a clue what to do about it."
Government will pay high price for help: With its demand that an inclusive
united Iraq government be formed the US is expecting a lot from the current
leadership in Iraq, the liberal-conservative Portuguese daily Diário de
Notícias observes: "Washington has recognised that Iraq is really facing
collapse, and that's why the chief US diplomat has been sent to Baghdad. In his
briefcase he brings promises, but also conditions. ... The US - like the EU -
wants incumbent Prime Minister Nouri al-Maliki to form a government comprising
Shiites, Sunnis and Kurds. A difficult decision for the Shiite Maliki, who has
been in power for four years and relies solely on the Shiites. But he will have
to comply (as quickly as possible) if he wants to save the country and the
region from the Sunni extremists. It looks like Saudi Arabia will stop
supporting the latter if Iran limits its influence on Baghdad - all this in
exchange for US backing, as it were."
Japan will retaliate for German export greed:
German exports to Asian countries like China, Vietnam and South Korea have risen
by an average of over ten percent annually in the past ten years. The fact
that with similar products Japanese exports have only increased by just under
seven percent per year will have consequences, the liberal French business daily
La Tribune warns: "Japan sees Germany's ambitions in Asia as an aggression that
calls for retaliatory measures. The first has been the monetary weapon: The Bank
of Japan started the offensive by lowering the value of the yen, which has
already depreciated by 30 percent against the euro since July 2012. Let there be
no mistake: seen from afar, Germany - and by extension the Eurozone - are
considered predators that, having sated their domestic demand, are now seeking
to sate the demand of other countries. But the rest of the world is not about to
sit back and let them do it."
Spaniards only show patriotism in football: The Spanish team won its last
game before its already definite departure from the World Cup 3-0 against
Australia. The conservative Spanish daily ABC notes approvingly that unlike
most of the time the Spaniards openly show their patriotism when it comes to
football: "The great virtue of football in a country with millions of fans is
its capacity to bring people of all ages, origins, social classes and cultural
levels together in their emotions, their passion and common goals. ... Through
football we have managed to be a nation - and that is something extraordinary.
True, we're normally a nation in private. Surveys have shown again and again
that the great majority of us feel Spanish and love our nation. But beyond the
private sphere we have problems expressing this identification with our nation