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by Euro Reporter
2013-02-15 09:21:42
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Austerity raises child poverty rate in Ireland to 19.7%

Child poverty rates have increased in five countries which are cutting their budget spending, including Ireland, a study has shown. Rates of poverty among older people and lower income workers are also increasing in some states, according to the study by Caritas, a network of Catholic charities. The study, covering Ireland, Greece, Spain, Portugal and Italy, said a “man-made disaster” had been created and that austerity policies were not working. Speaking at a briefing in Dublin, Jorge Nuño Mayer, secretary general of Caritas, said: “It is about political choices, and we strongly believe there are other choices.”

Spain has the highest child poverty rate at 27.2 per cent, with Italy at 24.7 per cent, Greece at 23.7 per cent, Portugal at 22.4 per cent and Ireland at 19.7 per cent. The EU average is 20.5 per cent. The youth unemployment EU average is 22.5 per cent – Greece is well above this at 55.4 per cent, followed by Spain at 52.9 per cent, Italy at 35.3 per cent, Portugal at 36.4 per cent and Ireland at 30.7 per cent. Emigration had reduced the unemployment rate among young Irish people, said Seán Healy, director of Social Justice Ireland, an associate partner of Caritas.

He also said more recent figures had shown a worsening situation in Ireland for poverty rates, especially among low income workers. These household were having to make difficult choices “between food and fuel in difficult winters” and with “parents going hungry” to feed their children and getting them educated, he added. Ireland and Cyprus were the only European countries last year for which the greatest impact of financial distress was seen among those with lower incomes, the study said. Nessa Childers, Labour MEP, said she was “disturbed” by some of the measures the Government has introduced and would be “challenging the Irish Labour Party to defend their values before the Irish people and not to be drawn into this type of agenda”. “Social democrats or centre-left parties have absolutely no business presiding over these kinds of policies. It destroys their legitimacy and the legitimacy of Government,” she added.

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It is in Europe's interest that Ireland's return to private funding goes smoothly

The deal struck last week to restructure the debt of Anglo Irish Bank marked a milestone in Ireland’s long journey to secure bank debt relief. Precise estimates about the savings vary. Pat McArdle argued in these pages that the effect of the deal was to lower the burden of the promissory notes by a third, or €8 billion, in today’s money, while the Government estimated that the State’s borrowing requirement should drop by €20 billion over the next decade. But as the Government was enjoying its moment in the sun, attention was already turning towards the next phase in the campaign to address the cost of bailing out Ireland’s banks as the State prepares to re-enter private debt markets by the end of the year. First stop was this week’s gathering of euro zone finance ministers. As usual, the meeting took place on the eve of a meeting of finance ministers of all 27 EU member states (chaired in this instance by Minister for Finance Michael Noonan as president of the European Council), but as always the real action took place at the Eurogroup meeting on Monday – the place where strategies and decisions on the core euro zone countries are discussed and adopted.

While Cyprus was on the agenda – the working out of the bailout of the Mediterranean island is the single most pressing issue facing the euro zone – much of the discussion was dedicated to the working of the European Stability Mechanism (ESM), the EU’s permanent bailout fund. The successor to the European Financial Stability Facility (EFSF) and the European Financial Stabilisation Mechanism (EFSM), the ESM was officially established in September last year after Germany’s constitutional court approved the establishment of the permanent fund after a constitutional challenge. While the fund has already been used to capitalise Spain’s banking sector via the sovereign, the more contentious issue of direct bank recapitalisation is now on the agenda. Direct bank recapitalisation will happen only once the Single Supervisory Mechanism of Europe’s banking system is up and running. That is at least another year away. Euro zone finance ministers have been given a deadline of the end of June to come up with an “operational framework” for the fund’s direct recapitalisation plan. However, there are mounting divisions between the members over whether the ESM should shoulder the burden of existing impaired bank assets, and whether the fund should retrospectively apply to previous recapitalisations.

Ireland has consistently argued that AIB and Bank of Ireland should be eligible for direct recapitalisations but there are signs that this possibility is receding. Part of this reflects a general scaling back of the scope and ambition of the fund. Sources in Brussels confirm that the portion of the fund dedicated to bank recapitalisations is to be capped at less than €80 million, the amount of paid-in capital contributed by the countries, with the cap likely to be lower. In part this is to protect the credit profile of the ESM fund itself. Recapitalisation of banks is perceived as more risky than investments in sovereigns. The ESM’s credit rating was already cut to Aa1 from Aaa by Moody’s in December. The euro zone ministers also discussed on Monday the possibility of attracting private investment to sit along ESM money in direct recapitalisations. The European Investment Bank and IFC already operate such a scheme, although it is unclear whether this would work when the recapitalisation of troubled banks is involved. Some sort of burden-sharing with the sovereign is now inevitable. That would again reduce the amount of uplift countries such as Ireland would gain from direct bank recapitalisation. Behind the scenes discussions are taking place between Irish and euro zone officials about the forms of debt relief.


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Ireland's Rangeland Foods withdraws burgers

Rangeland Foods, a processing factory in Ireland, has withdrawn some burger products after they were found to contain 5-30 percent horsemeat.

The burgers had been sold to the catering and wholesale sectors and across Ireland, the UK, Spain, France, Germany and The Netherlands, the Food Safety Authority of Ireland (FSAI) announced today.

The beef in the products had been supplied from Poland, the agency said.


         
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