Ajai Chopra has suggested how the ESM could be used to help Irish banks
By Business Editor David Murphy
Enda Kenny and Michael Noonan are getting ready for their lap of honour when Ireland exits the EU/IMF bailout.
But there is still one unresolved issue – it is becoming clearer that banks will need more capital.
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The question of CO2 emission targets is central to debate on the climate change bill
By Will Goodbody, Science and Technology Correspondent
@willgoodbody
Amid the hullabaloo surrounding penalty-point-gate this week, another event in Leinster House, with arguably far greater long term consequences for our future, and the future of our children, got overshadowed.
On the day the people of Moore, Oklahoma began counting the human and economic cost of a terrifying weather event, the Oireachtas Joint Environment Committee began discussing the heads of the Climate Action and Low Carbon Development Bill.
This long awaited piece of legislation sets out to deliver on the government’s stated objective of balancing the challenges and objectives of a low carbon future, with delivering on both environmental and economic grounds.
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By Seán Whelan, Economics Correspondent
Michael Martin has just made an important speech staking out radically new policy territory for Fianna Fáil on Europe, Britain and Ireland. In it he says:
- The economic crisis is so deep the EU can no longer keep watering down agreements to find the lowest common denominator.
- If that means a two speed Europe, the so be it.
- Britain’s in/out debate cannot be allowed to paralyse decision making for the next four years – important decisions must be taken now to restore the economy.
- The EU needs economic stabilisers like the US federal transfer system – if that needs a direct EU tax to fund it, he will support it.
-Â Ireland must get ready for a British exit from the EU – every government department should be preparing action plans now.
- Ireland should spell out what it wants from the EU and work with other countries to advance this agenda – it is no longer good enough to drift along with other people’s ideas and tinker at the edges.
Above all he said the Ireland “needs to stand up to the British Tory view of Europe”.
Micheal Martin told the Institute of European Affairs in Dublin that he is convinced a reformed EU is vital to Ireland’s future. But he says the Union is not working the way it is now. He said the EU does not have an agenda for overcoming the recession, and doesn’t even recognise there is a grave fracture in the union, that its debates are far behind the reality on the ground, and that the EU is fast losing legitimacy among the populations of Europe.
It wasn’t just the British who were targeted – without naming them explicitly it was clear he is ready to have a cut at the German view of the crisis and how it should be dealt with as well. He said the EU must stop expecting universal austerity to deliver growth. The policy is not working and needs to change.
As for Ireland, he says it needs to adopt a new role in Europe – that of critical friend – not afraid to speak out when it sees things it doesn’t like, and not afraid to advance its own policy ideas and seek out allies to progress them. This would be a radical break with past Irish practice at EU level.
“Our gradualist and conservative views worked for us in the past, but now we must define what our ideas are”.
The price of keeping Britain in the EU and satisfy the Tory Eurosceptics may well be too high, and this country should be prepared for a British exit. In communicating to the Irish people he set out a clear party line of opposition to the “British Tory view of Europe”.
He said the idea current among some in London that Britain can leave the EU and enjoy all the benefits of the single market was not on. And he said the EU risked damaging itself if it allowed Tory policy to dominate debate.
“If we allow those looking for re-nationalisation of powers to dominate the EUÂ agenda there will be a huge opportunity cost”, he said. The risk is that too much time and energy is spent trying to deal with the British view when it should be poured into dealing with the economic crisis – by developing the Banking Union among other things – as well as dealing with the undermining of democratic legitimacy of the EU, which is being eroded by the poor efforts to deal with it.
“People will be too focussed on trying to keep Britain in rather than deciding what price is worth paying. We need to focus on how the EU can be the driving force for social and economic developments over the next 20 to 30 years, not following the British Tory agenda for hollowing out the EU.”
This new European policy is likely to feature in next year’s European Parliament Elections, when Fianna Fáil will face its first countrywide electoral test since it lost power – and challenges from the left and right that may try and surf on the Eurosceptic waves coming from London. With some very selective “Brit bashing”, Fianna Fáil will be trying to be both nationalist and European at the same time.
After years of living in the slow lane it appears broadband in Ireland is about to improve
By Will Goodbody, Science and Technology Correspondent Â
@willgoodbody
When you see the long running campaign for better broadband, Ireland Offline, offering a hearty welcome to an announcement from Eircom, it’s a pretty clear indication that something positive has happened. And that was the vocal lobby group’s reaction yesterday to news that the Irish telco was ready to begin offering high speed broadband to up to 300,000 homes and businesses in the first phase of its fibre optic network rollout. For those potential customers who choose to avail of the service, it will mean access to up to 70Mbps up, and 20Mbps down, with a pledge of up to 100Mbps later this year as the technology evolves.
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ESRI research has called into question the way growth is measured in Ireland
By Economics Correspondent Sean Whelan
Few in Ireland have really taken GDP to be a serious measure of the Irish economy, because of the very large impact that the activities of foreign owned multinationals have on the numbers.  GNP has always been regarded as a more relevant measure.
But now it seems we can’t rely on that either.
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by Business Editor David Murphy
The rule book regarding what a euro zone country is permitted to do to fix its banks has been entirely rewritten
Critics have argued Europe has been making up the answers to the banking crisis as it went along in an amateurish fashion.
The evidence to back up that criticism is getting stronger by the day.
The rule book regarding what a country is permitted to do to fix its banks has been entirely rewritten. That raises deep questions about the €62 billion pumped into Irish banks and about future recapitalisations which are on the cards.
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Bank of Ireland is taking a different approach to split mortgages
By Business Editor David Murphy
Bank of Ireland chief executive Richie Boucher is on collision course with the Central Bank over mortgage arrears.
The issue revolves around his bank’s treatment of customers who are being offered split mortgages.
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Governor Honohan hopes Irish banks will get private funding for capital requirements in the future
By Sean Whelan, Economics Correspondent
Will the Irish banks need more capital?
Yes they will, says the governor of the Central Bank, Patrick Honohan.
He is sure because the new Basel 3 international banking rules change the classification of what counts as bank capital, and this will need more money – about €6 billion I hear.
That may not be a serious issue, for reasons outlined below.
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On the surface there may be reasons to be optimistic that Xtra-vision can survive in some form.
But dig deeper and the future looks bleak.
The stores are remaining open while the search begins for a buyer. The receiver says that most of the stores are profitable. Unlike many other retailers the company is not overburdened with debt.
However, this is a receivership not an examinership.
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British politicians hired legal experts to probe bank failures
By Sean Whelan, Economics Correspondent
So it looks like Matthew Elderfield is off to Lloyds Bank in London.
There is certainly a big job to be done in repairing the regulatory side there, if the recent UK Houses of Parliament report into its Halifax – Bank of Scotland (HBOS) unit is anything to go by.
Entitled “An accident waiting to happen”, the report doesn’t hold back in its conclusions, describing HBOS growth strategy as “a manual for failed banking” (the title of the concluding chapter).
It also draws the conclusion that “prudential supervisors cannot rely on financial markets to do their work for them”.
And most stark of all, for an Irish reader, is the committee’s conclusion of its investigation of the groups Irish operations that “the losses at HBOS were relatively greater than those of the other major Irish banking groups”.
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