Ireland

The Organisation for Economic Co-operation and Development has warned of big threats to Ireland’s “robust” growth, among them the risk of another property bubble, the Irish Times reported. Amid anxiety in the EU/IMF troika about Government moves to loosen the fiscal stance, the OECD said in a new forecast that Budget 2016 was “reasonable” once Dublin maintained progress to eliminate deficits in the public finances. The latest assessment from the OECD came as Minister for Finance Michael Noonan said he was confident the EU Commission will approve the Budget in the coming weeks.

Falling public spending will undermine the ability of public services to deal with social crises, a think tank has warned, the Irish Times reported. More than half the income gains of the last five years have gone to the top 10 per cent of earners, the Think-tank for Action on Social Change (Tasc) added.

Household debt fell to its lowest level since the first quarter of 2006 in the period April to June, according to new Central Bank data, the Irish Times reported. The latest figures show debt fell to €153.2 billion or €33,056 per capita in the second quarter of 2015, a decline of €1.3 billion or 0.9 per cent versus the preceding quarter. For the same quarter last year, household debt fell by €1.7 billion. The decline reflected debt repayments, write-downs and write-offs. The level of household debt has fallen by 24.8 per cent since its peak of €203.7bn in 2008.

Breakfast cereal company Kellogg last year routed €1.3 billion of sales from the UK and other parts of Europe through an Irish unit, the Irish Times reported. However, Dublin-registered Kellogg Europe Trading (KET), which is owned by a Luxembourg entity, paid no corporation tax here because its profits were wiped out by loans to another group company. KET made an operating profit but the company was pushed into the red by the interest on the €1.7 billion loans, and it ended up making a loss of €87.5 million.

AIB is seeking summary judgment for sums totalling around €25 million against 14 business people over alleged default on loans which they had guaranteed, the Irish Times reported. The 14, along with another man who previously consented to judgment for €1.68m, gave personal guarantees of between €170,000 and €3.8m on loans made to a company in 2008. AIB claims the 15 were liable on a several basis with limited individual liability.

Listed housebuilder Cairn Homes and Lone Star have both submitted indicative offers for a portfolio of Royal Bank of Scotland loans backed by land earmarked for houses in Dublin, according to sources. Centerbridge Partners was also among bidders for the package of loans known as Project Clear, according to another source, who said the deadline for bids was Wednesday. Project Clear is comprised of loans secured against 1,850 acres of zoned land, with room for 20,000 houses and apartments, according to one source. It is reportedly worth as much as €500 million.

The Irish lost more of their personal wealth than any other euro zone country in the aftermath of the financial crash while Germany and the Netherlands gained the most, fresh data from the European Central Bank shows. In an analysis of the years between 2009 and 2013, ECB experts discovered that Ireland lost more than €18,000 per person, while Spaniards saw wealth dwindle by almost €13,000 as property in both nations plummeted. Greeks saw their notional wealth decline by almost €17,000 for the same reason.

Risky lending by the banks is not the solution to the housing crisis, the deputy governor of the Central Bank, Stefan Gerlach, has said. Referring to rules on loan to value (LTV) and loan to income (LTI) ratios introduced by the Central Bank’s earlier this year, he said an examination of what had happened when the Irish property market crashed showed that loans with high ratios had very high default rates, the Irish Times reported.

Representatives from the Troika will travel to Dublin next month as part of the fourth post-bailout review of the Irish economy, as controversy over Ireland’s compliance with EU stability and growth pact rules emerged, the Irish Times reported. The European Commission declined to comment on claims Ireland’s budget may be in breach of EU debt and deficit targets, following suggestions by the head of the Fiscal Advisory Council, John McHale, that Ireland’s budget was too expansionary and could be in breach of EU rules under the Stability and Growth Pact.

Former Anglo Irish Bank chief executive David Drumm is charged with 33 offences, including forgery, conspiracy to defraud, false accounting and breaches of Irish company law and EU law, US court records show, the Irish Times reported. Each offence carries maximum sentences ranging from five years’ imprisonment up to an unlimited term of imprisonment, according to legal records submitted to the US District Court in Massachusetts. Details of the charges against Mr Drumm emerged after the legal case against him was unsealed and made public by the American court.