CONSTRUCTION SECTOR GROWING FASTER IN GREECE THAN IRELAND - The construction sector is growing faster in crisis-hit Greece and in Spain than it is here, despite higher overall growth in the Irish economy, according to new EU data.
Construction output right across the European Union remains well below pre-crash levels, with little sign of a recovery, writes the Irish Independent. In December 2014 production in construction fell by 3.5% compared to the same time a year earlier, in the European Union as a whole, according to figures from Eurostat, the EU statistics agency. At EU level, building of houses and commercial properties declined in 2014 but civil engineering showed some signs of recovery - up 3.8% compared to the previous year in the EU 28 and rising by a more modest 1.6% in the euro area. In Ireland, the most recent figures for the third quarter of 2014 showed a 10% increase in construction as the sector begins to emerge from half a decade of bust. However, the pace of the Irish building recovery in the third quarter was overshadowed by Greece - which racked up a 61.4% increase in output over the same period, and Spain where the sector grew by 12.4%. In the previous three months construction output increased by 10.4% here, compared to 22.9% in Greece and 33.1% in Spain - which also suffered deep and sustained property crashes.
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20% OF IRISH HOTELS AND B&Bs FAILING TO RECORD A PROFIT - One in five hotels and guesthouses are operating unsustainable business models and failing to make a profit after interest payments, reports the Irish Examiner. Latest figures available to the Irish Hotels Federation (IHF) show 150 to 200 of the country’s 800 hotels and guesthouses are not turning a profit after capital and interest payments, according to IHF chief executive Tim Fenn. Outside of the “big trophy assets” which are being sold off to investors, a large proportion of lower-tier hotels are yet to restructure their business to the requisite levels as legacy banking issues hang over them. Debt restructuring of up to €1.4 billion is needed to bring hotel debt to a sustainable level, according to the federation’s latest figures which Mr Fenn said are to be updated in the coming months as part of an upcoming review. With total sector indebtedness at €5.3 billion, the IHF has also worked with banks to restore trust between the two parties. "The Celtic Tiger years were uncompetitive," said Mr Fenn. "A lot of uneconomic and unsustainable development [took place] and now what you see is that it’s beginning to recover again. A lot of businesses are back in profit but they’re not sustainable yet because they haven’t restructured and they still have legacy issues to deal with the banks," he added.
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NEW UK LAW COULD SEE BANKERS PROSECUTED FOR AIDING TAX EVASION - The British government is close to a deal with the French authorities that will allow it to use previously leaked Swiss bank files to prosecute bankers and financial advisers, according to British chancellor of the exchequer George Osborne. Tens of thousands of pages of data taken from HSBC’s Zurich private banking arm by a whistleblower were given to London in April 2009 by France, but its use was restricted to chasing unpaid taxes, says the Irish Times. However, Mr Osborne told the House of Commons the “terrible” agreement signed by the last Labour government was being renegotiated to ensure the information could be passed on to the serious fraud office and other prosecutors. The Conservative-Liberal Democrats coalition is expected to include a new criminal offence of aiding and abetting tax evasion and aggressive tax avoidance in next month’s budget - the final one of the current parliament. Meanwhile, HSBC chairman Douglas Flint and senior HM Revenue & Customs executives will appear before Westminster’s influential treasury select committee tomorrow as it inquires into the conduct of the bank’s Swiss arm. Up to 100,000 clients received advice from the bank. Some 3,000 British names were given by whistleblower Hervé Falciani to the authorities after he stole the information in 2008.
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BANKERS HELD TO HIGHER STANDARDS THAN BISHOPS, CLAIMS HSBC CHIEF - HSBC’s chief executive has complained that bankers are being held to a higher standard than bishops as the UK government promised a legal crackdown on banks that facilitate tax evasion. Stuart Gulliver faced a volley of questions about the tax-evasion scandal that has enveloped HSBC’s Swiss private bank in the past fortnight, says the Financial Times. Describing the affair as a “source of shame” for him and his staff, he insisted its Swiss private bank had been cleaned up since the controversial practices took place in 2005 to 2007. “It seems to me that we are holding large corporations to higher standards than the military, the church or civil service,” said Mr Gulliver. “Can I know what every one of 257,000 people is doing? Clearly I can’t. If you want to ask the question could it ever happen again - that is not reasonable.” George Osborne on Monday announced he will use his Budget next month to combat practices exposed by the HSBC tax evasion scandal. Banks, accountants and others who advise clients on how to evade tax could face penalties running to hundreds of millions of pounds. The Treasury wants to close a legal loophole where individuals can face civil penalties for tax evasion but the financial professionals that collude with them are not subject to the same punishment.
