Ovi -
we cover every issue
newsletterNewsletter
subscribeSubscribe
contactContact
searchSearch
Apopseis magazine  
Ovi Bookshop - Free Ebook
Stop human trafficking
Ovi Language
George Kalatzis - A Family Story 1924-1967
The Breast Cancer Site
Tony Zuvela - Cartoons, Illustrations
International Red Cross and Red Crescent Movement
 
BBC News :   - 
iBite :   - 
GermanGreekEnglishSpanishFinnishFrenchItalianPortugueseSwedish
Irish report Irish report
by Euro Reporter
2011-07-31 12:03:05
Print - Comment - Send to a Friend - More from this Author
DeliciousRedditFacebookDigg! StumbleUpon
Ireland set to 'overachieve' on EU-IMF deficit targets

Ireland has met or “overachieved” in implementing the terms of the EU-IMF bailout, Minister for Finance Michael Noonan has said in a letter to the two institutions. In his quarterly letter to the EU-IMF on meeting the terms of the bailout, Mr Noonan said the Government was “on track to observe, and indeed overachieve” the target for reducing the budget deficit in 2011. The letter, of Thursday this week, was published yesterday by the Department of Finance. Although full and final details of the recapitalisation of the banks were not available from the department last night, a spokesman said all end-July commitments in this regard had been met. Yesterday, the Central Bank of Ireland published a new report on the economy and figures on the health of the banking system.

Among other things, it largely corroborated Mr Noonan’s views on the public finances, saying that targets in mid-year were “broadly in line with expectations”. The bank did, however, urge the Government to set out as early as possible the shape of the 2012 budget so that uncertainty for households and businesses would be reduced. The Central Bank’s forecasts for the economy, published yesterday in its quarterly bulletin, are marginally more downbeat than three months ago. It now expects the economy – as measured by gross national product – to shrink slightly this year. As measured by the wider indicator of gross domestic product, which includes multinational companies’ profits, the economy is expected to grow at 0.8 per cent this year, fractionally lower than forecast three months ago.

This growth will not, however, be sufficient to halt the decline in the numbers at work. According to the Central Bank, 31,000 fewer people will be employed in 2011 than in 2010. In 2007, there were 300,000 more people at work than there are now. The downward trend should be halted next year, the bank said. A net 4,000 increase in the number of jobs in the economy is expected in 2012. This reflects the bank’s expectation of stronger economic growth. Separate figures on the amount of cash held on deposit in the Irish banking system and its loans were also published yesterday by the Central Bank. They show that the decline in deposits in June was the smallest amount in almost a year.

**********************************************

Billionaire Ross bets on v-shaped Irish recovery


Positive news from Ireland is prompting a growing number of investors to look at the troubled euro zone economy, said billionaire Wilbur Ross, who this week invested 300 million euros in its largest lender. Ross surprised many by joining Canadian firm Fairfax Financial and California's Capital Group in a 1.1 billion euro ($1.6 billion) investment in Bank of Ireland (BKIR.I), the first significant foreign investment in Ireland's banking sector since it collapsed in 2008. Ross said the deal was fueled by positive news from Ireland that indicate it is breaking away from its troubled peers in southern Europe and embarking on a solid recovery.

These include the government's announcement it was ahead of target to bring its budget deficit under control, lack of protest against a harsh austerity program, and the European Union's decision this month to ease the terms of an 85-billion-euro international bailout. "The macro picture of Ireland ... is clearly headed in the right direction and will very likely have a more v-shaped recovery than most other European countries," Ross told Reuters in a telephone interview late on Friday.

"We have gotten a lot of inquires from other investing institutions that know us, asking about Ireland and suggesting that they at least are now willing to take a much better look than they were prior to all of this." Irish sovereign debt prices staged an impressive rally this week in spite of growing bond market volatility elsewhere in the euro zone, in part due to the vote of confidence from the investment in Bank of Ireland. Although Ireland is mid-way through an unprecedented eight-year cycle of austerity, social unrest is almost non-existent and unlike Greece and Portugal, Ireland is expected to return to growth this year because of a vibrant export sector and the flexibility of its economy.

**********************************************

Investors become more positive on Ireland


Ireland's insistence that it is different from Greece and the rest of the euro zone periphery appears finally to be striking a chord among investors. Irish sovereign debt prices staged an impressive rally this week in spite of growing bond market volatility elsewhere in the euro zone, which was hit by doubt over the effectiveness of the latest bailout plan for Athens and concern about the ability of Italy and Spain to weather the storm. While Madrid and Rome have only come under heavy market pressure over the past several weeks, Dublin is a veteran of the regional debt crisis, and its long-running efforts to tackle its banking and fiscal problems -- together with a relaxation of the terms of its 85 billion euro ($122 billion) international bailout -- are encouraging investors to take a second look.

"I think there is a re-rating by the market of Ireland," said Fergal O'Leary, head of capital markets at Glas Securities in Dublin. "There is a growing feeling among international guys that Ireland has faced up to its problems, it is doing what it needs to do." Unlike fellow bailout recipients Greece and Portugal, Ireland is meeting its budget deficit targets and has been singled out for praise by the International Monetary Fund and the European Union for its determination to get its annual deficit, still the largest in the euro zone as a proportion of gross domestic product, under control.

Although Ireland is mid-way through an unprecedented eight-year cycle of austerity, social unrest is almost non-existent and unlike Greece and Portugal, Ireland is expected to return to economic growth this year because of a vibrant export sector and the flexibility of its economy. The Irish government has been trumpeting these points for months, but it is only in recent days -- during which Europe agreed to relax the terms of Dublin's bailout as part of a new approach to Greece, and a group of U.S. and Canadian investors saved Ireland's largest bank from effective nationalization -- that investors took notice. Yields on Irish 10-year government bonds have tumbled to around 11 percent from a euro-era high of over 14 percent hit last week. Trading volumes have risen to over three times usual levels.

Portugal's 10-year yield has dropped more slowly, by about 2 percentage points to 12.7 percent. Spanish and Italian yields are much lower, in the area of 6 percent, but they have risen sharply in the past week. "It's real money and hedge funds coming in to cover shorts, but I would suppose the market is still extremely short there," said one bond trader of Irish debt. "It's funny, there are no offers in the market now, whereas before there were no bids."


        
Print - Comment - Send to a Friend - More from this Author

Comments(0)
Get it off your chest
Name:
Comment:
 (comments policy)

© Copyright CHAMELEON PROJECT Tmi 2005-2008  -  Sitemap  -  Add to favourites  -  Link to Ovi
Privacy Policy  -  Contact  -  RSS Feeds  -  Search  -  Submissions  -  Subscribe  -  About Ovi