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Archive for January 12th, 2013

Table of the Week

EU27UnemploymentNov12

On Tuesday, the European statistics agency Eurostat published the latest unemployment statistics for members of the European Community. At the top of the league is Spain with 26.6%, Greece with 26%, then Portugal with 16.3% and in fourth position is Ireland with 14.6%. Our neighbours in the UK have an unemployment rate of just 7.8% and even at that level, they’re pretty exercised about that. The outlook for Ireland is for a slight improvement but the consensus is that we’ll still have unemployment of around 14% at the end of 2013 and even by 2015, it will be over 13%. That’s the consensus – during the week the Nevin Economic Research Institute predicted unemployment increasing further to 15% in 2014 and 15.5% in 2015.

Management speak of the Week

Actually this will probably win the prize for bullsh*t of the year – the 2013 Health Service Executive National Service Plan, 24 slimline pages overflowing with vagueness which just about disguises the fact that the health service is set for some savage staffing cuts in 2013. Read the “Plan” and you might conclude that services were expanding, that more medical cards would be issued and that the service was undergoing an efficiency revolution. But look for detail of the savings, and you will be disappointed with talk of:

“Contemporary shared service platforms”

“increased focus in 2013 on ensuring that managers are held to account for the services they deliver”

“incoming deficit run-rate” of €391m per annum

“probity measures on medical cards” contributing €10m annual saving

“The HSE will receive accelerated income collection of an estimated €104m in December2012. The HSE and the Department of Health must work together to ensure that this does not reverse in 2013”

And at least €150m of “unallocated payroll savings”

Apparently there is to be a more detailed plan at the end of January 2013, but Health which has the most demanding of budget cuts in 2013, is not instilling confidence that it still doesn’t know how it will deliver the majority of payroll savings.

HSEEmployees2013

Currency development of the Week

In May 2012, we are to have a newly designed €5 note which is being introduced across Europe in response to the perceived risk of counterfeiting of the existing note. The new note will have not one, but two, watermarks and has a host of other security features.

Fiver

Perhaps we should ask An Tanaiste Eamon Gilmore for an assessment on how difficult it is to counterfeit, and Deputy Aengus O’Snodaigh for an ink analysis to see how expensive it is to produce.

Word of the Week

“substantial”

HelloThereSister

The traditional media had a field day this week with news that a user of Twitter had paid damages after producing a series of tweets in November 2012 which referred to inventor and telecoms entrepreneur Declan Ganley. After a low-key exchange between solicitors – with Paul Tweed representing Declan – an apology was issued by the Twitterer, Kevin Barrinton together with an announcement that a “substantial” donation had been made to the charity, the Poor Clares – see below for both statements. A couple of days later, it was reported that the “substantial donation” was in fact just €50.

 

KevinBarringtonTweets KevinBarrington

This incident recalls another defamation action late last year when junior Minister Lucinda Creighton had an unhappy court case where developer, Michael O’Flynn was claiming he was defamed by the junior minister in a speech and subsequent press and broadcast statements. The case was settled mid-way through with the junior Minister making a “contribution” to the legal costs of Michael. For his part, Michael described the contribution as “substantial”. We still don’t know what the contribution was, claims at the time that it was €150,000 were apparently angrily dismissed by the junior Minister though there didn’t seem to be dispute about “sources” claiming it was around €50,000 – it was donated to the Crumlin hospital by Michael in any event, but maybe “substantial” like “wealthy” is all relative.

European Language of the Week

The language of business, English? Esperanto? No, the European Commission has responded to an information request from here in the language of Gobbledygook.

EsperantoExasperated

The Commission was asked to provide the documents associated with the request by then-foreign minister, Micheal Martin in 2009 for approval of a property tax scheme. Normally, we wouldn’t need bother our partners in Europe with these schemes, but this one was so big, €212m, that it required Commission approval. The development for which taxbreak approval was sought was the Ritz Carlton hotel in Powerscourt, Wicklow, which was being developed by Treasury Holdings. A number of well-heeled developers, businessmen and others – including TV and radio presenter, Pat Kenny – bought into the scheme and are understood to have benefitted from the tax breaks, which could be jeopardized by the current difficulties at the development. The request for the documents was originally made on 20th November 2012, but on 11th December, the Commission said they would need more time to fulfill the request and the new deadline was yesterday, and lo and behold, at around 4.30 PM CET, the response came in from the Commission in the precise format above. The enablers of the request, an organization called Ask The Eu, confirm that this was the “text” of the Commission reply, and needless to say, it has already been queried, so hopefully next week, we might get at the documents which supported the largest ever property tax break during the Celtic Tiger property boom.

Debt collection technique of the Week

ShowMeTheMoney

Here’s a tip for you – if you’re ever crashing through electric gates with a car, don’t do what they do in the movies and drive at speed at the gates which is only likely to severely damage your car even if it does take the gates off their hinges, What you need to do is gently nudge the gates and you should overcome the motor and brake mechanisms in the gates with no difficulty at all and you won’t damage your car. If only a Galway man pursuing a developer for an alleged bill of €5m knew this. Instead Michael Reilly rammed the electric gates of developer, Donal O’Connor at the start of December. When charged by Gardai, he is reported to have said “He owes me €5m, so knock that off the price of the gate” It is not known if the developer, Donal O’Connor was at home at the time of the incident, in 2010, it was reported that he had “fled” to Australia leaving debts of €16m behind him.

Unanswered question of the Week

“Ireland had a successful bond auction this week. Does this now qualify Ireland for Outright Monetary Transactions (OMTs), or what does the country have to do to be considered for this programme?” ECB press conference on 10th January, 2012, to which the response, from ECB president Mario Draghi was

“As regards your second question on Ireland and whether it qualifies for OMTs or not, I have said repeatedly what the prerequisites for access to OMTs are. I don’t want to comment specifically on them – you know what they are.”

The ECB previously announced a new programme called “Outright Monetary Transactions” which promised to provide unlimited buying of a country’s sovereign bonds as long as that country had submitted to unspecified conditions from the ECB, inconjunction with the European Commission and IMF probably AND the country  “will be regaining bond market access.” In Ireland’s case, we already have strict conditionality under the Memorandum of Understanding with the bailout Troika of the EU, ECB and IMF and as demonstrated by the issuance of €2.5bn of 5-year debt at 3.3% this week, we are “regaining bond market access”.

So are we now entitled to unlimited funds from the ECB? We can only scratch our heads at Mario Draghi’s response.

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There has been a slow start to NAMA’s foreclosure activity in 2013, with no new court cases in Ireland. Yesterday though, we learned from Iris Oifigiuil that on 4th January 2013, NAMA had Michael McAteer at Grant Thornton appointed as receiver to assets of Tailored Homes (Irl) Limited, one of the many companies controlled by Northern Ireland’s Taggart brothers, Michael Taggart and John Taggart. Their group has been in trouble for nearly five years, and in July 2010, the administrator to a group of Northern Irish companies reported trouble in disposing of the group’s twin-engined Eurocopter EC 135 helicopter – on which there was a GBP 2m (€2.5m) outstanding loan – because the engines had been damaged. The collapse in Northern Ireland left debts estimated at up to GBP 300m. NAMA appears to be mopping up in 2013, and it is not clear what assets are subject to yesterday’s receivership.

The directors of   Tailored Homes (Irl) Limited are Michael Taggart (46) and John Taggart (53) and it appears that John Taggart owns 100% of this company which was incorporated in 2004. Its latest accounts for 2009 showed nearly €10m of negative shareholder funds.

Remember you can see the list of NAMA’s enforcement actions here and in this regularly updated spreadsheet.

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