HOSPITALS are expected to bear the brunt of the worsening financial crisis in
the health service, which is heading for another massive taxpayer bailout at the
end of the year.
Taoiseach Enda Kenny has admitted a supplementary budget for health will be
needed this year. However, Mr Kenny also expressed confidence in Health Minister
James Reilly, who is expected to be moved from his position next month.
Spending in the health sector is expected to overrun by €500m in 2014.
The HSE is now three times more in the red than the same time last year,
sparking a new wave of cuts.
The agency had a deficit of €158m at the end of May – compared to €49.3m for the
same five months in 2013.
The overrun this year is estimated at €500m by Department of Health secretary
general Ambrose McLoughlin.
The overrun in spending means services across hospitals and community services
are facing major cuts for the rest of year, hitting waiting lists and the
recruitment of much needed staff.
MORTGAGE advisers, tech specialists and skilled construction workers have seen
their pay packets soar by double digits this year as supply outstrips demand.
The hike in salaries in some industries is part of a two-tier economy, which is
widening for Ireland's workforce. (See table below)
Experts warn of a growing gap between the unemployed and those in work whose
positions are in demand after being hardest hit during the recession, like
mortgage collectors and underwriters.
"The biggest challenge is that there is a big gap between the 'haves' and the
'have-nots'," said Peter Cosgrave, a director of Cpl recruitment.
"We are finding that some jobs are hugely in demand and salaries are going up,
but at the same time there's a lot of areas where there's still very little
ONE of the biggest buyers of commercial property here since the crash has
signalled it is starting to move on from the Irish market, switching focus to
Kennedy Wilson Europe managing director Fiona D'Silva said pricing was "moving
ahead of itself" in Ireland and added that while the firm still planned to do
deals here, it has now begun to focus on Spain and Italy's real estate markets.
"We think it has been great in Ireland and see things still coming off banks'
[balance sheets] but pricing is moving ahead of itself a little bit so we are a
little bit more cautious and looking more at opportunities outside Ireland and
the UK to Italy and Spain," she said.
She was speaking at the Private Equity Real Estate (PERE) conference in London.
Her firm, Kennedy Wilson, has spent close to a €1bn on property in Ireland in
the last three years, investing in offices, apartment blocks and development
sites across the country – but especially in Dublin.
The company had been expected to set up a real estate investment trust (REIT) in
Ireland to run its portfolio here but instead decided to list its European
business in London earlier this year. That makes it easier to invest in markets
BANK of Ireland has become the first mainstream lender to sell Irish mortgages
it holds on its books – under orders from EU authorities in Brussels.
The loans are being sold to an unregulated investor fund based in Dublin, as
first reported in the Irish Independent.
The move is set to prove controversial because the affected homeowners are the
latest to lose their Central Bank consumer protections.
Bank of Ireland has agreed a deal to sell €250m of mortgages as part of the
disposal of its ICS Building Society unit – a sale ordered by European
Commission competition authorities last year.
The loans are being sold to newcomer Dilosk Ltd, an Irish company with plans to
become a mortgage lender in its own right here.
Dilosk could not be reached for comment yesterday, but according to its website
the company has applied to the Central Bank to become a regulated lender.
Senior Irish officials believe an Italian-led push for a loosening of European
budget rules may open up potential for a modest easing of the Government’s
fiscal path in the medium term.
In question now is whether EU leaders seek to draw a distinction between
day-to-day spending and expenditure on long-term investment when examining each
While high-level figures in the Coalition see no scope to dilute the EU-mandated
deficit target in the October budget, Italy’s demand for more budgetary
flexibility has reignited debate on whether the enforcement of strict fiscal
rules should be relaxed to stimulate economic growth.
One in every four loans to Irish small and medium-sized businesses was in
default at the end of last year, according to official figures due to be
The amount of money owed by small and medium-sized enterprises (SMEs) to the
Republic’s banks has fallen steadily over the last year three years, while new
lending to the sector remains static, the Central Bank’s SME Market Report
The study finds that these businesses, responsible for most of the employment in
the Republic, owed a total of €21 billion at the end of December 2013, down from
between €26 billion and €28 billion in January 2011.
A former director of Irish Nationwide Building Society (INBS) has alleged the
Central Bank and other State entities have joined together in exposing him to a
“vindictive and wholly unmeritorious” claim for damages of perhaps more than €1
billion and “ruin” him.
Letters, including correspondence from former INBS chief executive Michael
Fingleton, showed it was apparent to the Central Bank in 2006 and 2007 the INBS
board was not monitoring the delegation of the board’s powers to Mr Fingleton,
but the Central Bank “did nothing”, senior counsel John Rogers said.
The action brought against John Stanley Purcell and other INBS directors by
State- owned Irish Bank Resolution Corporation (IBRC) arising from the alleged
unlawful delegation to Mr Fingleton seemed to have been devised in consultation
with the Central Bank, he said.
Standard Chartered has warned of lower profits this year after a 20 per cent
slump in first-half earnings, as tougher regulations and low market volatility
hit its trading business.
The bank also said the head of its financial markets
Lenny Feder, was taking a one-year sabbatical and would not return in the
Revenues from the financial markets business, which includes
equities, commodities, foreign exchange and other capital markets activities,
are set to fall by a fifth in the first half from a year ago, the bank said in a
The Oireachtas banking inquiry has been advised it cannot
investigate the dramatic, late-night ministerial talks which approved the
infamous bank guarantee, because they are covered by Cabinet confidentiality.
The committee heard that the minutes of the 30-minute meeting and what former
taoiseach Brian Cowen discussed with his ministers are off-limits, but documents
and advice leading up to and after the Cabinet talks can be discussed.
Members were also told the cost of the Oireachtas inquiry could reach €5.2m,
when staffing, legal and set-up costs are included.
Committee chairman Ciarán Lynch confirmed that it had been agreed that the
inquiry would conclude its work by November of next year, and that a full
proposal on its work will be ready this September, when the Dáil returns from
its summer break.
However, legal advice given to members yesterday stated that questions cannot be
asked about the infamous Cabinet meeting of the night of September 29, 2008,
where the €440bn blanket bank guarantee was approved.
Euro Topics: Belgium once more menaced by
paralysis: The Flemish nationalist Bart De Wever has failed in his bid to
form a government coalition in Belgium. On Wednesday he was relieved of his
duties of informateur by King Philippe. Belgium can't afford a standstill now,
the business daily De Tijd warns: "The next five years will be hugely important.
If a government is formed it will be the first to have to tackle the bitter
consequences of an aged society. ... The pension costs are rising faster than
our prosperity. So the fact that Bart de Wever's coalition paper came to nothing
is a missed opportunity. The challenges the paper outlined are the tough reality
of the situation. We must create more jobs, make our companies more competitive,
fix our budget and make social security affordable. ... It's a bitter
disappointment that a month after the elections we clearly still aren't in a
position to deal with these challenges. We are wasting precious time."
Think big in Ypres: The EU heads of state and government will meet this time
in the Belgian municipality of Ypres, the scene of many battles during the First
World War. In view of the significance of the location, the left-liberal
Danish daily Politiken hopes the summit will be marked by success: "Never before
have we been so closely intertwined with each other. Never has there been so
much social welfare. And never before has such a small country as Denmark had so
much scope and so many possibilities to influence its own fate. ... Now Europe's
leaders should take a stance on the current problems and the signals their
voters have sent. They know that Europe must focus on the big problems and set
the little ones aside. ... They know that the main issues are the young people,
security, energy and the climate. ... They must think in terms of the big
picture and present concrete results to convey a positive image of the EU to the
Europeans. In contrast to Europe's protest parties the heads of government can
give the voters an answer."
Wilders' Europe revolution has fizzled out: PVV chief Geert Wilders only has
himself to blame for the failed bid to form a Eurosceptic bloc in the European
Parliament, the liberal Dutch daily NRC Handelsblad comments, not without a
touch of regret: "It's not surprising that Wilders has ended up isolated. He
deliberately formed an election alliance with Marine Le Pen's Front National,
but other politicians with anti-European ideas were repelled by this party's
anti-Semitic past. So Wilders should have known better but he persisted in
cooperating with Le Pen. The result is that his announced political revolution
has fizzled out. Even if you don't share the views of the Eurosceptics it's
lamentable they are so fragmented in the European Parliament. ... A strong
dissenting voice is good for a lively democracy."