FRANCE AND GERMANY CALL FOR CLOSER EURO ZONE INTEGRATION - Mario Draghi, the European Central Bank President, got the ball rolling around yesterday when he hinted that the ECB would be prepared to weigh in with some further assistance for indebted euro zone member states but only if politicians agree on a binding "fiscal compact". French president Nicolas Sarkozy has taken up that ball and ran with it overnight calling for closer integration and a new treaty to re-found the EU. We now await with interest what German Chancellor Angela Merkel has to say to her parliament in a key speech today.
Louise Cooper, analyst at BGC Partners in London, says some clear divisions still remain between Sarkozy and Merkel over where exactly the euro zone is heading and how much national sovereignty will be handed over. Germany wants a more controlling role while France does not want to go that far, especially ahead of key presidential elections next year. The analyst says it is clear that the euro zone's Growth and Stability Pact did not work, with the slap on the wrist not enough to deter errant countries. She says that ECB president Mario Draghi seemed to imply yesterday that he was reluctant to get the ECB to print more money - German is also opposed to such a move. She says the ECB is experiencing a ''mission creep''. Explaining that it was set up to control inflation in the euro zone, she says it seems to be taking on more of a monitoring role.
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RENTS SET TO RISE NATIONWIDE - The ESRI told us earlier this week that there is no immediate sign that residential property prices have finished falling. But property consultants Savills predict that residential rents, having fallen 25% across the country since 2008, have bottomed out and could rise by up to 14% across the main cities by 2013
Ronan O'Driscoll, director of residential at Savills, says that people are simply moving away from buying houses due to a number of factors including the limited availability of finance. He said there had been a huge oversupply of rental properties on the market but this has since eased. He says that people are especially looking to rent houses and as there is very limited availability in this sector, prices rise. He predicts that is lots of capacity for higher rents in the coming months.
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MORNING BRIEFS - Eircom has until tomorrow to formulate a plan to deal with its €3.7 billion debt burden having breached lending covenants with its banks during the summer. This morning it is reported that the company is close to securing a deal with its main lenders that will restructure that debt but only at the cost of handing them control of the company in exchange for a writedown on the €2.4 billion they are owed. Junior debtors owed the remaining €1.3 billion would be wiped out, according to the Irish Times.
*** On the currency news the euro up a shade against the dollar this morning to $1.3471 and 85.8 pence sterling.
