AER LINGUS REPORT HAS STILL NOT GONE TO PASCHAL DONOHOE - Transport Minister Paschal Donohoe is still awaiting a report by the Government's working group into the potential sale of the State's stake in Aer Lingus, writes the Irish Independent. Mr Donohoe said he will examine the contents of the report closely before bringing a recommendation to Cabinet on whether to proceed with the IAG deal. Speaking at a Tourism Ireland event in Dublin City, Mr Donohoe said he will not allow negotiations to continue "indefinitely". But he said patience was required given the sensitivities at play. "These are very sensitive discussions for them as a company but they are extremely important discussions for us as a country because of how important access is for our country," Mr Donohoe said. "Aer Lingus alone carries 40% of the passengers in and out of our three main airports. It is one of the largest employers in our country," he added. Mr Donohoe said he will not be bringing a memo to cabinet on the IAG bid tomorrow. He confirmed that he is still waiting the report from the inter-departmental group. The Dublin Central TD refused to be drawn on weekend reports that the IAG deal is nearly conclusion and that the airline giant is to offer longer guarantees over the valuable Heathrow slots.
***
TULLOW OIL CUTS A THIRD OF ITS DUBLIN WORKFORCE - Tullow Oil says it is making "about a third" of the more than 140 staff at its Dublin offices redundant, as the company slashes its cost base to deal with lower oil prices. The staff who are leaving were informed late last week, following a consultation period that started in early March. There had been rumours within the industry that Tullow was preparing to let go more than 40% of its Irish-based workforce, but the company insisted on Monday that the number due to depart is "about 46", says the Irish Times. Many of those leaving are highly paid members of its exploration team, including geologists and others in skilled science-based roles. Tullow, whose share price and profitability collapsed along with the price of oil, is seeking to remove about $500 million (€466m) in annual costs from the group, and it has also initiated redundancy schemes at some of its African subsidiaries, such as in Ghana. Chief executive Aidan Heavey has said the company, which recently reported an annual loss of about $2 billion, needs to be able to cope with oil prices of $50 a barrel "long-term".
***
€1.3 BILLION IN WATER BODY COSTS - More than €1.3 billion will be added to the government deficit over a three-year period if a key Eurostat decision on Irish Water goes against the Government. The embattled water utility was provisionally classified by the Central Statistics Office (CSO) as residing on the Government's books in March. The temporary decision was taken by the CSO pending clarification from the EU's Luxembourg-based stats agency, Eurostat, whose decision could land more than €1 billion extra on the State's balance sheet, reports the Irish Examiner. If the classification becomes a permanent arrangement, a €340m readjustment on the country's 2014 deficit will be recorded. Similarly, an adverse decision that sees the State on the hook for Irish Water's funding would add 0.3%, or €580m, to the government deficit this year and a further €395m in 2016. The figures, published in response to a parliamentary question from Sinn Féin finance spokesman Pearse Doherty, show the scale of the decision and the potential impact on the State's finances. In his reply, Finance Minister Michael Noonan said the utility had been placed temporarily on the Government's books, while Eurostat considered a classification proposal from the CSO. The temporary measure sees Irish Water's planned expenditure booked as general Government spending while revenues generated are similarly included in the overall government total. With Eurostat making classifications biannually, the EU agency's decision is due in October.
***
BRITISH REGULATOR CHALLENGES US OVER BERKSHIRE SCRUTINY - British regulators have challenged their US peers over their apparent reluctance to subject Warren Buffett's Berkshire Hathaway to tougher scrutiny as part of a worldwide push to make the financial system safer. The Bank of England has written to the US Treasury asking why Berkshire's reinsurance operation - among the world's most powerful - was left off a provisional list of "too big to fail" institutions drawn up by the Financial Stability Board. Regulators have already deemed nine primary insurance companies - including AIG of the US, Germany's Allianz and UK-based Prudential - globally "systemically important", a designation that could lead to higher capital requirements. But they have put off saying which reinsurers - groups such as Swiss Re, Munich Re and Berkshire, which provide insurance for insurers - should be included, reports the Financial Times. The failure to designate reinsurers has angered insurance companies, which argue reinsurers are more important to the financial system. In a separate move that underscores concern about the increased scrutiny brought by designation, MetLife has sued the US government to try to escape being deemed systemically important by Washington. Insurers deemed systemically important on a global level may need to hold more capital to cover unexpected losses and could face a requirement to draw up “living wills” to make them easier to wind down in a crisis. Yet regulators have yet to quantify the scale of the HLA requirements and the consequences of designation remain unclear.
