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Irish report Irish report
by Euro Reporter
2014-01-18 13:10:30
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Ireland regains investment grade rating from Moody’s

The credit rating of the Irish Government has been raised to investment grade by Moody’s the most influential of the international credit rating agencies. In a statement tonight, Moody’s said that it was upgrading Ireland’s credit rating by one notch to Baa3, the lowest investment grade.  Prior to the financial crisis Ireland held a AAA or “triple A” rating. The highest possible. New York-headquartered Moody’s also changed the outlook for Ireland’s credit rating from stable to positive, holding out the prospects of a further upward re-rating later in the year. Moody’s said the reasons for the upgrade were the growth potential of the economy and the Government’s exit from the EU-IMF bailout.  “The first driver of the upgrade is the recent acceleration of economic growth, which indicates an increased likelihood of securing the sustained long-term growth needed to achieve a turnaround in Ireland’s public finances. A key positive signal is the faster pace of employment creation, with the unemployment rate having dropped 2.7 percentage points from its Q2 2012 peak, despite a rise in the participation rate,” it said in a statement tonight.

It also noted the Government’s ability to exit the bailout without a precautionary credit line, which it said “reflects that the government’s reform agenda stayed largely on track throughout the programme, despite weaker than expected domestic and external economic conditions”. It said that it expects Ireland will hit its target of reducing its exchequer deficit to below 3 per cent of economic output by 2015. Other factors included the regaining of market confidence through the restructuring of the banking system. “As a consequence, our baseline expectation is that the government will need to provide very little, if any, of the capital that the Irish banks may need following the upcoming EU-wide stress tests, consistent with its Baa3 rating.” it said. The only sour note was struck over the slow pace of the clean-up of the banking system. Moody’s warned that the pressure being brought to bear on the banks by the Central Bank is “ likely to increase foreclosures, impairing profitability and potentially dampening the housing market recovery”. The positive outlook was attributed to an expectation of a sustained recovery in the Irish economy and signs of stronger growth coming through from the rest of Europe. If the economy grows rapidly enough to put Ireland’s debt to GDP ration “on a firm downward path”, then a further upgrade is likely.

“Downward pressure would develop... should the country’s fiscal consolidation process falter,” pushing the debt ratio significantly above its current level of roughly 100 per cent.Moody’s is the last of the main credit rating agencies to give Ireland an investment grade. All three – including Standard & Poor’s and Fitch – had cut Ireland to sub-investment or “junk” status in the aftermath of the 2010 financial bailout from the IMF and EU.  The re-rating by Moody’s clears the way for more conservative investors, particularly in the Middle and Far East, to buy Irish Government debt. Many of these funds are precluded from investing in Government debt if it does not have an investment grade rating from all three of the big credit rating agencies.  Speaking earlier yesterday at the launch of a new $100 million joint-venture investment fund between Ireland and China, Mr Noonan said: “A lot of Asian funds would like to invest in Irish government bonds, but they need all the ratings agencies to have Ireland at investment grade first. But I have no doubt that, before too long, there will be funds flowing from China to the Irish sovereign.” The yields on Irish bonds – a measure of investor appetite – have fallen steadily since it became clear late last year that Ireland would successfully exit its the bailout. The yield on the benchmark 10-year bond was 3.17per cent at the close of trading last night. The impact of the Moody’s re-rating will not be clear until markets reopen again on Monday. The National Treasury Management Agency – which raises and manages debt for the Government – raised €3.75 billion last week in its first foray into debt markets since Ireland exited the bailout on December 15th. The NTMA is not expected to look to raise more debt in the short term. “I am pleased to note that one of the main drivers for today’s upgrade was Ireland’s restored market access,’’ the NTMA chief executive John Corrigan said last night. “The change to the ratings outlook represents a positive context for future rating reviews.” Moody’s also upgraded the debt ratings of the National Asset Management Agency, whose debt is guaranteed by the Government, to investment grade and its outlook to positive.

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A window into the soul of Ireland

In 2003, there was much interest in the opening up of the archive of the Bureau of Military History (BMH), which included over 1,700 statements taken from Irish War of Independence veterans in the 1940s and 1950s. Their accounts of the role they played in the war were locked up in Government Buildings in 1958, with no agreement as to when they might be opened, but with a consensus that it would not be for at least another generation. That was hardly surprising; many of the events and legacies of the revolutionary era were still raw and divisive in the mid-20th century, and there was legitimate concern about allegations and accusations that might be contained in the statements with no right of redress. As they were being put away, the distinguished librarian Richard Hayes, a member of the BMH advisory committee, suggested it was imperative the BMH material should not be made available to the general public, writing to a colleague: “If every Seán and Séamus from Ballythis and Ballythat, who took major or minor or no part at all in the national movement from 1916 to 1921, has free access to the material it may result in local civil warfare in every second town and village in the country.”

Six decades later, this assertion of Hayes might be seen as delightful exaggeration underpinned by a good deal of snobbery. It highlighted not just the sensitivities and divisions of the era, but also the issue of who the story of the revolution belonged to and who should be in a position to research and document it. One of the most notable developments in recent years in relation to the history of this period and access to its documentation has been increased democratisation, including the opening up of archival material (much of it digitised) to much bigger audiences than was previously the case. It is no longer the preserve of an academic elite; a lot of it, including the BMH archive, is open to anyone with an internet connection. The launch yesterday of the first batch of documents from the archive of the Military Service Pensions Collection (MSPC) and an accompanying website, marks a further development of this process, but it is on a much larger scale than the BMH archive. The MSPC is an archive that is monumental in its detail and scope, and it is likely to transform research into, and understanding of, Irish republican military endeavour from 1916 to 1923 as well as the political, social and cultural forces underpinning it.

It has involved an awesome effort on the part of a small number of archivists based in the Cathal Brugha Barracks in Dublin, who have had to tackle the processing, cataloguing and digitisation of a collection that amounts to nearly 300,000 files, which will be released in phases over the next few years. The collection has its origins in a decision of the Oireachtas in June 1923 to recognise and compensate wounded participants and deceased participants’ dependents. The legislation necessary for this was followed in turn by Military Service Pensions Acts of 1924 (which excluded those who had fought on the anti-Treaty side in the civil war and female volunteers in Cumann na mBan) and 1934 (which rectified these exclusions).

Other acts followed in order to amend, clarify and define many issues to do with the pensions process, including the crucial question of what constituted “active service” between 1916 and 1923. The administrative infrastructure necessary to implement the acts involved boards of assessors, referees and various overseeing committees, and the pensions that were awarded depended on rank and length of service and were graded A (maximum) to E (minimum), payable at just under £5 per year of service and per grade. What will this archive mean in relation to an understanding of the revolutionary period? It is the single most important archival collection relating to the republican revolution from 1916-23. It will open many doors to an understanding of the role of republican volunteers from 1916-23 in every part of the island. Pension applicants had to provide very detailed accounts of their activities and their testimony needed to be verified and clarified, sometimes through oral hearings. The process involved the creation of an enormous body of supporting documentation. What was apparent during the whole pensions administrative process, from the 1920s onwards, was that the bar would be set very high in relation to qualifying for a pension or compensation, and defining what constituted “active service”.

In the words of William T Cosgrave, the first head of government in the Free State, in 1924, definition of active service made it clear the government “does not intend there should be any soft pensions”. This was, and remained, the case; the archive is, as a result, also a chronicle of great disappointment, as the vast majority of those who applied for pensions were not awarded them. A government memorandum in 1957 revealed that 82,000 people applied for pensions under the 1924 and 1934 acts; of these, 15,700 were successful and 66,300 were rejected. The value of the archive is that regardless of success in applying, all the applications, and any follow up correspondence or appeals, were kept on file and for this we owe a debt to the generation of public servants who ensured the material was preserved. The archive contains an extraordinary level of testimony and detail about individual and collective republican military endeavour, but it also reveals much about frustrated expectations, concern about status and reputation, and difficulties of verification. While the list of those awarded military service pensions at the highest grade under the 1924 and 1934 acts reads like a roll call of some of the best known gunmen and later politicians of that era, the bulk of the archive is filled with the voices of those who were not household names, and documents many voices of desperation and urgent pleas for pensions due to the abject circumstances of a host of War of Independence and Civil War veterans.

The archive, with its wealth of information on military service, engagements, tactics and strategy, will provide historians of the War of Independence and Civil War with abundant material to deepen an understanding of the nature and logistics of the war, the extent of membership of republican organisations, exceptional detail on the activities carried out by military units, the degree to which the republican campaign was effectively co-ordinated and the extent of local initiative. When the material is fully released, those with personal connections to this period will have an opportunity to research the narratives relevant to their families; to fill in gaps, discover stories for the first time, be enlightened and surprised or perhaps angered and deflated. The multitude of narratives in the archive contain a variety of sentiments and tones; pride, arrogance, anger, self-belief, righteousness and, more often than not, dignity.

It is also an archive that opens a window on social and economic history and tells us much about the revolution’s afterlife. In July 1941, for example, Nora Connolly O’Brien, daughter of the Labour leader James Connolly, executed after his leading role in the 1916 Rising, and who herself had been an active member of Cumann na mBan, wrote to a confidante that she had not “heard a word yet from the Pensions Board . . . I am at my wits’ end. We are absolutely on the racks. This week will see the end of us unless I have something definite to count upon. There seems no prospect of anything here so we have written to England applying for jobs. I’m absolutely blue, despondent, down and out, hopeless and at the end of my tether.”  There was relatively good news for her in October 1941 when she was awarded an E grade pension amounting to £29.7.6 a year. For those seeking to survive or eke out a bare subsistence in the 1930s and 1940s, every penny generated by War of Independence service was precious.

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Ireland largest trade surplus per capita

Ireland recorded the largest trade surplus per capita among eurozone countries in November at €31.3bn and the third highest overall behind Germany and the Netherlands. The eurozone recorded a trade surplus of €17.1bn over November compared with €12.5bn for the same period in 2012. However, most of the increase stemmed from a drop in exports.

Meanwhile, a number of Irish manufacturing industries should see their employment figures rise as a result of the growth in the US and British economies, according to an Investec Ireland Export Analyses Report for the third quarter of last year which found the highest level of growth in three years at 0.6%.


Head of Treasury with Investec Ireland, Aisling Dodgson, said that the manufacturing sector including electrical goods and information technology goods should see a boost in employment. While in the US personal consumption drove the fastest growth in GDP in four years at more than 4%.


         
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