Daily Insolvency News Headlines

Thu., February 26, 2015

Thu., February 26, 2015

Of all the challenges Greece has faced in recent years, prodding its citizens to pay their taxes has been one of the most difficult, The Wall Street Journal reported. At the end of 2014, Greeks owed their government about €76 billion ($86 billion) in unpaid taxes accrued over decades, though mostly since 2009. The government says most of that has been lost to insolvency and only €9 billion can be recovered. Billions more in taxes are owed on never-reported revenue from Greece’s vast underground economy, which was estimated before the crisis to equal more than a quarter of the country’s gross domestic product. The International Monetary Fund and Greece’s other creditors have argued for years that the country’s debt crisis could be largely resolved if the government just cracked down on tax evasion. Tax debts in Greece equal about 90% of annual tax revenue, the highest shortfall among industrialized nations, according to the Organization for Economic Cooperation and Development. Greece’s new government, scrambling to secure more short-term funding, agreed on Tuesday to make tax collection a top priority on a long list of measures. Yet previous governments have made similar promises, only to fall short. Read more. (Subscription required.)

Thu., February 26, 2015

Rising property prices have not yet lifted a significant proportion of Irish homeowners out of negative equity, according to a new report from the Central Bank, the Irish Times reported. In its latest Household Credit Market Report, the Central Bank presents data which shows that over 50 per cent of mortgages taken out in 2007 were still innegative equity at June 2014. Those who bought in 2005 and 2006 are also likely to still be underwater, with Central Bank showing that approximately 40 and 45 per cent of these home buyers, respectively, are also in negative equity. The survey points to an increase in the volume of new lending in the run-up to its new mortgage lending restrictions, with new home loans increasing from €750m in the third quarter of 2013, to €1.1 bn in the same period in 2014. The number of new loans rose from 4,482 to 6,308. First time buyers accounted for 51 per cent of new loans in the third quarter, with movers accounting for 35 per cent and just 4 per cent for investors. “The share of FTBs has been consistent throughout 2014,” the Central Bank said. While variable rate mortgage holders continue to pay over the odds for their loans, the survey found that the average interest rate on outstanding mortgages in Ireland is 2.77 per cent. Read more.

Thu., February 26, 2015

Switzerland refused a request for assistance to help bring prosecutions here on the basis of the leaked HSBC Geneva banking files, according to the Irish Revenue Commissioners. Revenue chairman Niall Cody has also told the Dáil Committee of Public Accounts that 13 people are the subject of ongoing investigations arising from the Swiss data, with the amount in their accounts involving a maximum of $14.83 million. Mr Cody, in a letter to the committee seen by the Irish Times, said the Revenue successfully sought the HSBC files from the French authorities in 2010, having read about their existence in the media. The total deposits associated with Ireland were greater than $6 billion, the files indicated. Read more.

Thu., February 26, 2015

A deepening power crisis that has triggered almost daily outages across South Africa, hitting key industries as well as households, has forced the government to sharply downgrade its growth forecast for the year, the Financial Times reported. Nhlanhla Nene, the finance minister, highlighted energy supply as the government’s critical challenge as he projected that growth for the year would be 2 per cent, down from the 2.5 per cent the Treasury forecast in October. “Our primary challenge is to deal with the major structural and competitiveness challenges that hold back production and investment in our economy,” Mr Nene said. “Electricity constraints hold back growth in manufacturing and mining and also inhibit investment in housing and raise costs for businesses and households.” He was speaking as he delivered an austere budget that reins in government expenditure by R25bn ($2.2bn) over the next two years and raises income tax 1 per cent for all but the country’s lowest earners. It is the first such tax rise since the 1990s as the government tries to curb debt and the budget deficit, while grappling with the bleak outlook. Read more. (Subscription required.)

Thu., February 26, 2015

Ukraine’s economic woes deepened Wednesday as its central bank drastically limited access to foreign currency in an effort to halt the hryvnia’s free fall, and Russia threatened to halt natural-gas deliveries, The Wall Street Journal reported. The hryvnia’s decline has accelerated in recent days, in part because of delays in parliament on legislative measures needed to unlock financing from the International Monetary Fund, as well as continued fighting in eastern Ukraine with Russia-backed separatists. The truce, which went into effect 10 days ago, appeared to be taking deeper root, offering some respite even as Ukrainian officials accuse the militants of regrouping for further attacks. Read more. (Subscription required.)

Thu., February 26, 2015

Professor of Accounting at UCD, Eamonn Walsh told Deputy Pearse Doherty that using today’s standards Anglo would still appear as if it were on course for a profit of almost half a million euro, the Independent reported. “There has been no change in standards so one could reach much the same conclusion today as one would have reached in 2008”, he added. The inquiry has also heard how inaction by both the Central Bank and the Banking Regulator had resulted in “costly failure” and how political bias may have unduly influenced the decision to bring in the Bank Guarantee. Economics Professor Gregory Connor from NUI Maynooth said the Bank Guarantee was “clearly wrong on balance” He added “I think there was political bias. I suspect they thought what’s best in our political situation” instead of looking at it from the perspective of the public. The property development community, he said, “had a very strong relationship with members of the Dail” and he suspected that that too played a role but this area was beyond his expertise. Prof Connor described “light touch banking regulation” in this country as the “second worst in the world” - second only to Iceland at the time. Read more.

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