Today in the pressThursday 11 April 2013 12.39
GERMANY MAY SEEK CONCESSIONS FROM IRELAND FOR NEW LOAN DEAL - German chancellor Angela Merkel is facing political pressure in Berlin to demand fiscal concessions from Ireland in exchange for granting extra time to repay crisis loans. A new troika report has recommended extending maximum average maturities by seven years as an “important catalyst for the full restoration of market access” for Ireland and Portugal. The report, seen by the Irish Times , warns of a “potentially challenging” situation ahead for Ireland “if market conditions become more adverse again” and, after presenting five options, proposes a seven-year maximum average maturity extension on loans as “the best compromise” to ease a return to markets. European finance ministers asked the EU-ECB-IMF troika and the European Financial Stability Facility (EFSF) to examine options for revising loan terms with a view to reducing Irish and Portuguese refinancing terms in the next 10-15 years. Finance ministers meeting informally in Dublin this weekend will discuss the resulting report, which describes Ireland’s looming borrowing requirements as “demanding . . . but well manageable”. No binding decision is expected on the report at the Dublin meeting, though political agreement would mark another step in an incremental process to improve Ireland’s financial position ahead of a planned return to markets later this year.
AER LINGUS STAFF COSTS STILL AMONG HIGHEST IN THE EUROPEAN INDUSTRY - Aer Lingus still has the fifth-highest costs per employee among European airlines, despite pay cuts and freezes in the past four years. A survey by international aviation group CAPA said the cost per employee at Aer Lingus was €74,818 on average, way above the average at Ryanair, where the average is €49,182, reports the Irish Independent. The most expensive employees are at the troubled Scandinavian airline SAS, where the average is €104,342. British Airways is at number nine, at €66,851. That is lower than Easyjet, where the average is €70,472. The research is published as airline bosses, including Willie Walsh, the chief executive of IAG, which owns British Airways and Iberia, and Aer Lingus boss Christoph Mueller gather at a two-day international aviation think-in in Co Wicklow, organised by CAPA. "How much it costs to keep an employee at work is not just a function of wages, but is also affected by the level of social charges, the seniority mix of employees and the level of pension contributions - all areas in which unionisation and history can play a major part," notes CAPA. When he took over as chief executive of Aer Lingus in 2009, Mr Mueller embarked on a radical cost-reduction programme that has shaved more than €100m a year from the airline's cost base.
LAGARDE WARNS OVER THREE-SPEED WORLD - A three-speed global economy faces risks from a currency crisis in emerging markets or unsustainable debt in the US and Japan, IMF managing director Christine Lagarde has warned. Speaking ahead of the International Monetary Fund’s spring meeting in Washington next week, Ms Lagarde said that the world was dividing into three groups - some countries doing well, some on the mend and some still in trouble. The Financial Times says that her speech highlights a new phase for the global economy in which the uneven pace of growth around the world is creating new financial imbalances that could sow the seeds of a future crisis. “We do not expect global growth to be much higher this year than last. We are seeing new risks as well as old risks,” Ms Lagarde told an audience in New York on Wednesday. “In far too many countries, improvements in financial markets have not translated into improvements in the real economy.” Emerging economies were growing fast, she said, but low interest rates in advanced economies were prompting them to build up debt and foreign exchange exposure that could cause trouble. “Over the past five years, foreign currency borrowing by firms in emerging markets has risen by about 50%,” said Ms Lagarde. “Over the past year, bank credit has increased by 13% in Latin America and 11% in Asia.”
POST OFFICE ANNOUNCES PLANS TO LAUNCH CURRENT ACCOUNT - The UK Post Office has announced plans to re-enter the current account market with a new banking deal for consumers over the next few weeks, writes today's Guardian. Details of the account are scant, but it is thought that the combination of a well-known brand and a large branch network could make it a serious challenger to the big four banks, particularly when new rules making it easier to switch accounts come into force later this year. Nick Kennett, director of financial services at Post Office, said that research into the current account market had suggested customers primarily want "simplicity, transparency and good value for money". He added: "With over 11,500 branches, which is more than all the UK banks combined, we can provide this through the most convenient and accessible retail network in the UK." Post Office already offers a range of financial services including savings, credit cards and travel money, and recently introduced in-branch mortgage advice for consumers. Kennett said that the launch of a current account was part of the "significant transformation" of the brand. The account will initially be launched in a small number of branches, before a wider-roll out next year.