MERKEL AND SARKOZY PROMISE AN END TO EURO ZONE CRISIS - Another weekend and another crisis meeting to save the euro. German Chancellor Angela Merkel and French President Nicolas Sarkozy meet in Berlin and vowed a response to the euro zone debt crisis within weeks, insisting they were united on plans to shore up Europe's banks. We will have to wait a few more weeks for the details of the plan, but so far the omens are good with the euro rising this morning and European markets looking to open with gains.
Donal O'Mahony, global strategist with Davy Stockbrokers, says the Euroland has to deliver on a number of key areas - a final solution to the Greek funding crisis, credible recapitalisation plans for euro zone banks and a vision for future governance. He says the latest plan - to be unveiled towards the end of the month - will see either euro zone problems peaking or the crisis move into an even more virulent phase.
The strategist says that in 2008, the focus of the markets was on the toxic exposure on the banks' balance sheets to sub-prime property. Three years later the new toxicity on the banks' books is the level of government debt. He says there is a grim irony that the solvency and funding difficulties we faced a year ago and which led us to the IMF/EU bailout is now like a comfort blanket as it insulates us from the worst of the chaos in Europe.
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One in four IBEC member companies are planning to recruit additional employees before the end of the year thanks to what it describes as a "significantly improved" export performance that involves gaining new customers and winning market share. IBEC's business confidence confidence survey has only been around since the doldrums of the financial crisis in 2009 but this is the first time that those planning to shed jobs have been balanced by those planning to increase staff numbers or at least not let people go. However, the gains and the losses cancel each other out meaning the overall labour market is more muted.
IBEC's director of policy Brendan Butler says that Ireland has a ''first mover advantage'' in Europe at the moment because our recent woes forced businesses here to cut jobs and wages and Irish businesses have become much more competitive. He says the fact that 25% of Irish firms plans to increase their workforce is very positive, but admits that a two speed economy still continues to exist here. He says that the export sector continues to grow stronger while the domestic economy continues to struggle, especially the retail sector. Consumers do not have the confidence to spend and Mr Butler urges the Government to help restore that confidence.
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MORNING BRIEFS - The wholesale price of both gas and oil increased in September, according to the monthly Bord Gáis Energy Index. The index fell 3% to 135 in September thanks to a $12 fall in the international price of a barrel of oil. The benefit was offset by a depreciation of the euro against the dollar and the index still reads 21% higher than it did a year ago.
*** The Nobel prize for economics will be announced later today. The prize is worth 10 million Swedish Kroner, which is about €1m.
*** On the currency markets, the euro is worth $1.3480 and 86.3 pence sterling.
