EURO ZONE DEBT WOES RUMBLE ON - A diplomatic row broke out over the weekend after it came to light that a secret meeting was held in Luxembourg last Friday night involving the bigger EU states, the European Commission and the ECB. They were there to discuss the Greek debt crisis.
We were not invited, in fact many smaller countries did not even hear about the meeting until Germany's Der Spiegel newspaper late on Friday reported that Greece was threatening to leave the euro zone, as it can not meet its debt repayments.
Justin Urquhart Stewart, of Seven investment Managers in London, says that is it pointless to expect indebted countries to pay high interest rates on their loans when they don't have the funds to growth their economies. He says the euro zone needs a clear plan coming through which will aim for fiscal unity. He says discipline is needed to make sure that the current crop of problems does not occur again, although he adds that rules were in place in the past in the euro zone which were ignored.
The analyst says that Ireland is not bankrupt, but has maxed out its credit cards. Giving it another credit card will not solve its problems, he warns. He says the Irish banks need further surgery to take out its debts. On the euro, he says that further nervousness is expected. He says the euro will not collapse but countries have to be realistic.
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ELAN TO SELL EDT BUSINESS FOR ALMOST €1 BILLION - Elan has announced this morning that it is selling its Elan Drug Technology unit in Athlone for almost $1 billion. The buyer is a US biotechnology firm called Alkermes. The deal will see Elan keep a 25% shareholding in Athlone and the $960m deal is made up of $500m in cash, and the rest in shares. The business will be called Alkermes plc. The business in Athlone employs 450 staff and Ireland will become Alkermes' European headquarters.
Elan's chief executive Kelly Martin said the US firm Alkermes is committed to maintaining staff levels in Athlone, and he said the move is a positive one for Elan's shareholders as it reduces the company's debt and improves its capital structure. He says that Ireland is a great place to base further investment for the newly formed company and adds the company plans to keep a healthy presence here.
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MORNING BRIEFS - Irish consumer sentiment dropped in April because of higher borrowing costs, disappointing economic data and the publication of an even bigger bill for bailing out the banks weighed. The KBC Ireland/ESRI Consumer Sentiment Index showed though, that Irish consumer sentiment has held up better when compared with falls in other European countries.
*** On the currency markets this morning, the euro is trading at $1.4373 cents and 87.73 pence sterling.
