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Posts Tagged ‘ Finance ’

Gardai Reveal Severe Threat To Irish And UK Based Businesses

business

The Garda Bureau of Fraud Investigation has recently detected a pattern of criminal activity that has the potential to cause serious financial losses to both public and private Businesses.

Up to 14 cases have been reported to date, with potential losses of over €5m, however €100k has been stolen. A number such bodies based around the country have received fraudulent instructions in the recent weeks via Email or letter which instructed them to record new account details for their various clients. There is no pattern in the fraudulent account details as they involve different financial institutions in both Ireland and the UK. Continue reading

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Rural GAA Clubs Are Struggling With Financial Deficits

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The GAA is a nationwide community which has nurtured many generations both on and off the pitch for many years. At the centre of many communities, the local GAA club is where dreams have become reality and where they are all too often shattered. For clubs that are pivotal to their community, GAA is much more than just a sport. It is a religion, a passion, a dedication and the glue which binds generations together. However, with the current bleak economic climate, it is apparent that rural clubs have suffered severe financial blows.

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Brutal Noonan Unveils Bombshell Budget

Noonan_Budget_2013_dec052012Upon unveiling  Budget 2013 , the Minister for Finance Michael Noonan said there are signs that the country is emerging from the worst of the economic crisis but despite that he still implemented measures which make the richer richer and the poorer poorer.

He said the bailout programme was being fulfilled, but further cuts were still necessary as we are by no means out of the abyss.

The main highlights of Noonan’s brutal budget, which has no doubt been overseen by Germany prior to publication includes:

No increase in excise duty on petrol or diesel.

From midnight, a packet of 20 cigarettes increases by 10 cent while tobacco will also increase

From midnight, excise duty on a pint or beer or cider will increase by 10 cent, on a standard measure of spirits by 10 cent, and on a bottle of wine by €1.

The rate of VRT and motor tax will increase from 1 January.

Minister Noonan said a property tax would be introduced at a rate of 0.18 per cent — and for properties valued over one million euro it will be 0.25 per cent.

Unearned income for everyone else will become subject to PRSI in 2014.

From 1 July 2013, maternity benefit will be treated as a taxable income, but will continue to be exempt from the Universal Social Charge.

In his Budget speech, the Minister for Public Expenditure and Reform Brendan Howlin said Public Service staff numbers will be reduced to around 287,000 in 2013.

In health, the Budget measures will result in the current 50 cent per item prescription charge for medical card holders being increased to €1.50.

People over 70 years of age with a medical card will have it replaced with a GP only card, if their weekly income is €600 to €700 for a single person or €1,200 to €1,400 for a couple.

The amount private patients have to pay for medicines each month, before the State covers the cost, rises from €132 to €144, which will save €10 million.

The health budget for next year will be €13.6 billion which the Government says represents an extra €150 million.

With Budget 2013 comes another wave of hurt and austerity for the people of Ireland, we are no closer to emerging from the abyss despite what propaganda the government sell us.

Greece Places More Pressure on Europe

Late Monday night Greek Prime Minister George Papandreou announced that his government would hold a referendum to decide on the EU-IMF debt programme they had negotiated. If rejected by the Greek electorate it could lead to increased risk of a forced Greek sovereign default, potential exit from the Euro and ultimately place severe pressure on the stability of the euro zone.

Janis Emmanouilidis, a Greek-German analyst with the European Policy Centre in Brussels said:

“It’s as if he (Papandreou) set off a bomb under the whole continent,”.

The negotiating of the deal agreed with Greece had caused much consternation within the euro zone with many countries uncomfortable agreeing to the level of concessions being granted to Greece, especially in agreeing to take a 50% reduction in the return on Greek bonds. When a deal was eventually reached it was believed this would be the end of the Greek dilemma for the EU yet this act by Papandreou has caught EU officials off-guard and caused more panic in the market.

The decision to go to the polls lead to the Euro closing on Tuesday 3% down against the dollar from where it had opened on Monday morning. Michael Derks of FxPro(foreign exchange traders) said

“the current situation is bordering on a farce of epic proportions and the reaction in financial markets reflects this,” .

Ratings agency Fitch released a statement Tuesday stating that a rejection of the deal by Greece would have severe financial implications for the financial stability and viability of the
euro zone.”

Criticism has also been forthcoming from other EU officials, especially in France and Germany where officials admit they were caught off guard by Mr. Papandreou’s decision to put the deal to a vote in Greece.

Rainer Brüderle, former economy minister and leader of the liberal Free Democrats who are part of Angela Merkel’s ruling coalition said: It sounds as if someone is trying to wriggle out of what had been agreed,”.

French President Nicolas Sarkozy called Mr. Papandreou’s decision “incomprehensible” and “totally irresponsible”.  He went on to reiterate that the only way to solve Greece’s debt problem was for them to adopt the deal that had been agreed last week. This point was seconded by German officials who stated that there is no question of renegotiating the deal should the Greek electorate not approve of it.

“Announcing something like this only days after the summit without consulting other euro zone members is irresponsible,” Slovak finance minister Ivan Miklos said. Irish Minister for European Affairs Lucinda Creighton said that this grenade had been thrown just a few days after the European summit was meant to have dealt with the uncertainty in the euro zone.

 

Mr. Papandreou was summoned to a meeting today with furious European Leaders where he will be asked to explain himself and according to German officials, have the “riot act” read to him.

Upcoming Budget to Test Coalition?

Rumours abound of rising tensions between the governing coalition parties as a result of negotiations over the upcoming budget. This is in light of comments made my Labour TD and Minister for Energy, Pat Rabbitte who said he expects negotiations on the matter to be “extremely difficult.”

As part of the terms of Ireland’s bailout the government are committed to reducing the national budgetary deficit to a figure of 8.6 per cent of GDP. Initially it was envisaged that this figure could be reached with a budgetary adjustment  amounting to €3.6 billion, however the recently formed Fiscal Advisory Council now recommends an adjustment of €4 billion in order to reach the 8.6 per cent target.

The council is an independent public body which was created under the terms of Ireland’s bailout to monitor and advise the government on economic and fiscal matters, primarily regarding the long-term repayment of its debt. Upon analysis of the council’s recommendations it would appear it is very much of the opinion that harsh budgetary measures in the short-term should lead to long-term benefit for the country and a more rapid exit from our debt constraints.

The council recommends imposing additional cuts of €400 million along with the €4 billion in order to exceed this years targets and advises further cuts beyond those planned for the 2012-2015 budgets, in the belief that this strategy would be more beneficial to the country’s future.

The actual benefit of such severe cuts has been debated by many, some of whom believe such a contraction in the economy would actually prove to be harmful, perhaps even reducing demand and slowing recovery. This last point was even acknowledged by Minister for Finance Michael Noonan when he was questioned on the FAC’s recommendations. When speaking on the issue Mr. Noonan stated his position that the government would reach its committed targets even if “it takes more than the €3.6 billion to do so”.

It is this issue that has caused some unease with the labour party side of the coalition. Minister Rabbitte believes that these extra cuts, beyond what was planned, would actually be “counter-productive economcially”, he also stated his belief that “to do what we said we would do and to take out €3.6 billion in itself will be very, very difficult.” Minister Rabbitte also appeared to hint that any additional cuts may not have the backing of the Labour Party, stating that those proposing more cuts “wouldn’t have my support.”

Today Taoiseach EndayKenny was quick to deny any rift within the Cabinet over this issue and said that more information was required by the Government before any decision could be made.

Mr. Kenny said, “there is no split in the Cabinet. I think the question that Minister Rabbitte was asked yesterday was a clear question and was answered with the level of information that was available to him.”

Eurozone Under Pressure

Eurozone Under Pressure

The future of the Eurozone has been called into question over the last number of months due to the likelihood of Greek default, the billions already borrowed by Ireland and Greece and the tension caused by financial difficulties in Portugal, Spain, Italy and now the French banking system.

Matters will not have been helped last night as Fitch, the credit rating agency, downgraded Spain and Italy’s credit ratings due to their worsening sovereign risk profile. The downgrades will cause an increase in the cost of borrowing on the financial markets for the countries involved. It also means that countries being downgraded generally must increase the rate of return they provide on their sovereign bonds in order to entice investment in these bonds. As a result when it comes to repayment of bonds it can cause an extra financial strain having to repay at such high rates. As it stands, due to a severe lack of confidence on the part of the financial markets in Eurozone countries such as Ireland and Spain, the European Central Bank has had to buy these sovereign bonds in an effort to avoid worsening levels of debt.

France, seen as one of the economically healthier nations, is now feeling focused pressure especially as a result of the current trouble. French banks are known to be the biggest holders of Greek debt and as such in line to take the biggest losses on any “haircut” in the levels of repayment from Greece. Lenders to Greece had already agreed a 21% loss on Greek bonds in July’s €109 billion Greek rescue. However due to worsening conditions in Greece a loss on Greek bonds of up to 50% is being discussed. France are believed to be against taking this level of hit due to their large investment in those bonds.

France’s position appears to be growing more unstable with emergence of the news that French banks are growing increasingly in need of recapitalisation. One bank caught up in this quagmire is Dexia, which came close to collapse recently and is now due to be broken up. France is at loggerheads with Belgium over whose taxpayers should pay to salvage the cross-border municipal lender.

However the most worrying relationship development of late is between France and Germany, two countries that are essentially the de-facto Eurozoneleaders.

Germany want to increase the hit taken by those who lent to Greece in order to attempt to prevent a Greek default, as explained earlier France do not want this. Furthermore, as mentioned above, France are looking for extra funds in order to recapitalise their banks and are looking to the European Financial Stability Facility (EFSF) for assistance. However the use of EFSF funds in this manner is in contrast to the traditional stance of Germany and chancellor Merkel.

In summary, not only are financial markets, the U.S. and World leaders worried about the financial and economic condition and failure of EU countries, specifically those in the Eurozone, they are worried about the knock-on effect of these countries defaulting, also divisions between its two leading countries in France and Germany and perhaps the collapse of the Euro.

The latter event seems far too unlikely and it must be safe to assume that whatever decisions that need to be taken to prevent this, no matter how un-palatable, will be taken.

Investigation Into Anglo Continues

The enquiry into the activities of Anglo Irish Bank received a boost today when Gerald Conlan, one of the businessmen lent money by Anglo Irish Bank to buy shares in the bank, was ordered by Naas District Court to disclose documents and information on the deal.

Mr. Conlan had previously refused to assist the enquiry into Anglo however today it was indicated on behalf of Mr Conlan that he would be complying with any court order made. Conlan is only one of ten “golden circle” businessmen who received the loan of €451 million in July 2008 to purchase a 10 per cent stake in the bank.

Paul Appleby, the Director of Corporate Enforcement, had applied for the court order and earlier expressed his satisfaction with the outcome:

“I welcome the successful utilisation of these new Criminal Justice Act provisions in aid of the Anglo investigations.”

The loan to Mr. Conlan and the other businessmen was a result of a €2.8bn loan given to Sean Quinn so that he could invest in Anglo Irish Bank. Directors of the bank wanted shares in the hands of these businessmen as a means of more share control amid fears that Quinn could sell all his shares on the market at once, leading to the price of the Bank’s shares falling rapidly.

Former Anglo auditors Ernst & Young are also facing investigation as they were the Bank’s auditors during the period that lead to much turmoil in the Bank, the period that also saw the above mentioned loans aswell as those to ex-chairman Seán Fitzpatrick and the €7bn deposit received by Anglo from Irish Life and Permanent.

Anglo Irish Bank, under control of the Minister for Finance, has also made a claim to US Courts to deny bankruptcy to former Anglo chief executive David Drumm. Anglo had previously filed documents with courts in the US outlining the extent of the actions by Drumm during his time in the bank and highlighted the financial transfers to his wife which reached “fever pitch” in December 2008, on the eve of his resignation as Anglo’s CEO.

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