S&P MOVES TO CLARIFY COMMENTS ON STATE OF GOVERNMENT - International credit ratings agency Standards & Poor's has attempted to defuse the controversy surrounding its comments about the Government's ability to lead Ireland out of recession. SP director of European sovereign ratings Frank Gill told The Irish Times he had not meant to question the State's leadership when he spoke early yesterday of the need for "new faces in Government". He said: "It is not about leadership. It's about the enormity of the challenge and the uncertainty of what's going to happen with the banking system in particular." Mr Gill was commenting after the agency had been accused by senior political figures of an inappropriate intervention in Irish politics. In the Dáil yesterday Taoiseach Brian Cowen queried what the experts from the ratings agency knew about Irish politics, while Labour Party deputy leader Joan Burton said the composition of the Irish Government was not the business of a "foreign ratings agency". Former taoiseach Garret FitzGerald questioned the timing of the S&P intervention, saying the agency would have been wiser to wait until after next Tuesday's budget to make its judgment.
LENIHAN TO PRESS FOR SCRAP DEAL ON OLD CARS - Motorists face a Budget boost which would make it cheaper to buy a new car and get rid of their old bangers, says the Irish Independent. In what would be a massive shot in the arm for the ailing motor industry, which employs 45,000, Finance Minister Brian Lenihan has put a car scrappage scheme before his colleagues for the emergency Budget. However, it's not yet clear if the Government will proceed with the plan as there are doubts over its potential impact and the cost to the exchequer. Taoiseach Brian Cowen yesterday reiterated that the tax take will be €3 billion lower than was thought in January and the trend of a decline in taxes has continued in March. The industry wants a scrappage scheme introduced to encourage owners of old cars to get a cash sum of €2,000 for scrapping an old car, and possibly an emissions-linked VRT reduction. More than 3,000 jobs were lost in the last three months of 2008 and around one car dealer is closing each week. New figures to be published later today will show that the 66% plunge in sales during January and February continued in March. The motor industry claims a scrappage scheme would cost the Government nothing and could generate added revenues for the State in additional VRT and VAT.
THOUSANDS OF OVERVALUED 'AFFORDABLE' HOMES LIE IDLE - Thousands of over-valued "affordable houses" bought by councils at boom prices are lying vacant because people cannot afford to buy them, says the Irish Examiner. Figures from the Department of the Environment reveal that the number of affordable units has risen 40% - from 2,200 at the end of 2007 to 3,700 today. Officials are concerned they may only be able to sell off about half the current stock, making the additional 2,270 houses coming on stream this year very problematic to offload. Local authorities are struggling to sell the homes - despite the fact there are approximately 28,000 on the waiting lists - because prices have not fallen in line with the rest of the market. The houses were bought at pre-recession prices and developers are not renegotiating price cuts despite the drastic change in market conditions. Added to this, potential buyers cannot secure mortgages because banks will not sanction loans on these overvalued properties, leaving councils searching for other options to deal with the massive housing glut.
CITY SHUTS UP SHOP AHEAD OF PROTESTS - From Gucci and Hermès stores to coffee shops and nail salons, businesses in the heart of the Square Mile went into a pre-summit lockdown on Tuesday night. Thousands of anti-G20 protesters are expected to converge on Wednesday on the City from four Tube stations and march on the Bank of England, says the Financial Times. Fearing the worst, shops and offices were boarded up, banks warned employees to dress down and roads around the Bank were closed as police investigated a suspicious package nearby. Demonstrators who blame London's bankers for the global financial crisis say they are planning to "reclaim the City." Although banks and brokerage houses told employees they were expected to show up for work, many small businesses will shut down for the day. "It's too much of a risk to open," said a staff member at Lora Piana, an Italian fashion boutique. "We're not bankers, but we're known as a place where bankers shop." At the Royal Exchange, Gucci, the Italian designer store, planned to close and take its handbags and high heels down from the window display for the day. One employee said the loose coalition of demonstrators - including anarchists, climate change activists and anti-war campaigners - might not just be angry with the banks, but also have strong feelings on issues such as animal rights.