Ireland

Europe's debt crisis entered a critical new phase as Ireland resisted pressure from the European Central Bank and national governments to seek a bailout amid growing concern that the currency bloc could unravel, The Wall Street Journal reported. Ireland fiercely denied that it was in bailout talks, and European officials publicly insisted Dublin was under no pressure to seek help.

There may have been good news for home building group McInerney this week, when Ireland’s High Court extended its period of examinership protection, but elsewhere, there was a further sign of the difficulties in the construction industry with the release of Ulster Bank’s Purchasing Managers’ index (PMI) for October, InsolvencyJournal.ie reported. The PMI shows an increase in the rate of decline in construction activity, for the second month running, to 42.3 in October, from 44.5 in September. A reading below 50 indicates a reduction in activity.

Ireland warned on Thursday that a surge in its borrowing costs to record highs had become "very serious" and the EU said it was ready to act should the humbled former "Celtic Tiger" require a rescue from its euro partners, Reuters reported. European officials said they were monitoring developments in Ireland closely but denied for a second day running that Dublin was seeking financial aid, in an ominous echo of the rhetoric that preceded an EU/IMF bailout of Greece six months ago.

Nama and the banks have taken effective control of Michael McNamara and Company, one of the biggest building and civil engineering groups in the Republic, after the State's assets agency rejected the group’s business plan, The Irish Times reported. It is understood that the group voluntarily asked Dublin accountants and corporate insolvency specialist, Farrell Grant Sparks, to take over as receiver late last night.

Two Dublin-based estate agencies are to go into direct competition with insolvency accountants to handle the ever-increasing number of properties going into receivership, The Irish Times reported. The agencies are in the process of setting up individual insolvency divisions to manage non-performing property assets while a strategy is agreed to realise their maximum value. Commercial agent HWBC has formed a 50:50 joint venture company with UK agent Allsop to offer fixed-charge receivership in the Republic.

Interviews with dozens of bank and government officials, and an examination of documents released by the Irish parliament, reveal that Ireland misjudged its crisis early on. Desperate to preserve the homegrown banking system, the government—blind to just how sour Irish loans had gone—yoked the fate of the nation to the fate of its banks, The Wall Street Journal reported in an analysis. Along the way, the government was hobbled by faulty information from outside advisers, from a trust-and-don't-verify regulatory culture and from the troubled banks themselves.

The Construction Industry Federation told the board of the National Asset Management Agency (Nama) last month that its €5 billion working capital facility was “inadequate” to “manage [out] or improve” the €74 billion in distressed property assets that have been transferred from Irish-owned banks, The Irish Times reported. In a hard-hitting presentation, made to the board of Nama on October 7th and seen by The Irish Times , the federation added that “most borrowers now believe Nama to be a massive liquidation vehicle”.

Ireland's credit unions may need to be significantly restructured if arrears continue to rise and lending opportunities remain subdued, the official in charge of regulating the industry warned on Monday, Reuters reported. Some of Ireland's credit unions -- community-based savings and lending clubs owned by their members -- lent aggressively during the go-go years of the "Celtic Tiger" economy and are now struggling during a severe downturn.

Ireland's commercial-property bust has knocked the country's banks to their knees. Now the lenders are bracing for another blow: losses on home loans, The Wall Street Journal reported. So far, residential mortgages haven't been nearly as big a problem for Irish banks as their portfolios of loans to finance real-estate development and construction projects. Those ill-fated property loans have saddled the banks with tens of billions of euros in losses, forcing the government to mount a series of costly bailouts that have pushed Ireland to the brink of insolvency.

The High Court has ordered the liquidator appointed to building contractor Pierse to investigate the group’s activities over the last 18 months, following concerns raised by a number of its creditors, The Irish Times reported. Mr Justice Peter Kelly appointed Simon Coyle of Mazaars as liquidator to Pierse Contracting and Pierse Building Services after the two companies unexpectedly withdrew their petition for the High Court’s protection from their creditors. CF Structures, to which Pierse owes €5.7 million, and a number of other unsecured creditors, proposed Mr Coyle’s appointment.