BANK OF IRELAND NOTES HEIGHTENED CONCERNS IN MARKETS AS CONDITIONS REMAIN TOUGH - Bank of Ireland has said that residential property prices do not appear yet to have fully stabilised and that arrears in its Irish residential mortgage book have continued to increase in the first three months of the year, reflecting the difficult economic environment in Ireland and elevated levels of unemployment. Ahead of its Annual General Court or AGM in Dublin today, Bank of Ireland has said that trading conditions in January, February and March were challenging. It said that while consumer confidence surveys have shown improvements, domestic economic indicators remain weak, with unemployment still high.
The Bank of Ireland statement also mentioned the markets. It said that Ireland has been meeting its commitments under the EU/IMF support programme, but that there has been some heightened concern in the markets in recent weeks about the economic performance of some other euro zone countries.
Katie Martin, currency editor at Dow Jones Newswires and the Wall Street Journal, says the markets were totally blindsided by events in the Netherlands over the last few days. She says we had thought we had reached a point when we knew what the worry about and when, but the political crisis in the Netherlands took everyone by surprise. The Dutch coalition government fell yesterday when it could not agree on spending plans aimed at stabilising the strained public finances and the country now faces a cut in its credit rating. It is one of four euro zone countries which still has a AAA rating. Katie Martin says the events in the Netherlands shows that there is still a lot of disagreement over the euro and austerity measures needed to save the single currency.
The journalist also says that recent events in France is worrying for the euro. While the strong showing for Hollande was not surprising, what took everyone by surprise was the scale of support for right wing parties, who are not supportive of the euro. She says it is difficult to hold talks on the euro when even some of the core euro zone states are not totally behind the currency.
The fact that Spain has gone back into recession also caused distress on markets yesterday. She says that while the Spanish government has predicted a contraction of 1.5% for the year, economists think this is far too ambitious because of the huge austerity measures currently underway in the country.
