Ireland

Dublin has won approval from its bailout masters to ease back on €3.1bn in planned austerity measures in its 2014 budget as long as it meets existing deficit targets in its programme, the Financial Times reported. The European Commission said on Tuesday that Ireland’s latest plan to implement €2.5bn in tax rises and spending cuts next year, rather than €3.1bn originally agreed with Ireland’s international lenders, “provided a sound basis for taking forward the necessary consolidation”.

Bankrupt developer Seán Dunne has suffered a setback in the US courts after being ordered by a judge to attend court, answer questions and provide all information requested by the trustee managing his case in Connecticut, the Irish Times reported. In an order issued yesterday, bankruptcy judge Alan Shiff said Mr Dunne must “completely answer all questions posted by the trustee and turn over all documents requested by the trustee without limitation or qualification”.

The Central Bank of Ireland has urged the Government to push ahead with €3.1 billion of cuts and tax hikes in this month’s budget, warning any scaling back of the planned fiscal adjustment “runs the risk of starting to unwind the positive effects” of the considerable consolidation effort to date, the Irish Times reported. In its latest quarterly bulletin, the Central Bank said there was no point in putting at risk the hard-won gains of the past several years for the sake of “a relatively small short-term fiscal easing”.

Irish voters are preparing to shutter one of the two chambers of parliament in a referendum that will take place on Oct. 4, one of the few examples of austerity reducing the number of politicians, The Wall Street Journal reported. Having survived in one form or another for an almost uninterrupted stretch of over 90 years, the parliament's 60-seat upper house now faces oblivion if voters decide by a simple majority to get rid of it. Opinion polls suggest that over 60% of those voting Friday will cast ballots for the 'Yes' proposition, sealing the fate of the upper house.

The Gathering has failed to halt the flow of companies in the Republic’s hospitality sector going to the wall, according to the latest figures, the Irish Times reported. Figures highlighted yesterday by the Insolvency Journal show show that 118 companies in the hospitality industry went to the wall between January and September, a 2 per cent increase on the same period in 2012, when the number was 116.

The decision to liquidate IBRC could lead to “substantial savings” for the Government, the Fiscal Advisory Council has claimed, but it warned that the level of savings would depend on the market view of the country’s creditworthiness, the Irish Times reported. The Government decided in February to liquidate State-owned IBRC to reduce the annual cost of toxic lenders. Estimates at the time placed the annual savings at around €1 billion. However, the advisory committee said the gains from the move relative to the size of Government debt would be small.

New State-backed insolvency deals will fail to lift large numbers of people out of debt, the first academic study of the system has concluded. The findings come after accusations that the Insolvency Service has been set up mainly to benefit the professional classes, and is not for PAYE workers. Critics have charged that the new process is set to be a rescue-mechanism for those with buy-to-lets, after the head of the service admitted that broke families that have no income and no assets they can sell off will be unable to avail of the new deals.

The National Asset Management Agency is planning to sell two loan portfolios in the coming weeks for an estimated €350 million to €400 milliion. This will add to the €2.2 billion in loan and asset sales already achieved by the agency this year, the Irish Times reported. Addressing a meeting of the Association of Chartered Certified Accountants in Limerick yesterday, Nama chairman Frank Daly said they portfolio comprised of “prime retail and residential as well as offices”. Nama refused to comment further on the specifics of the loans, citing commercial sensitivities.

The slew of objections filed this week in the US bankruptcy proceedings of Irish Bank Resolutions Corporation (IBRC) has delayed by several weeks its bid to protect up to $1 billion of its assets from potential seizure by creditors, the Irish Times reported. Kieran Wallace and Eamonn Richardson of KPMG, the special liquidators of IBRC, had originally sought an emergency hearing at a Delaware court yesterday for Chapter 15 protection. This would protect its US assets from a litany of lawsuits brought against it by US creditors, until the bank’s Irish wind-down was completed.

Up to five investors are understood to be willing to bid at least €950 million to buy the loans given to the property group controlled by Michael O’Flynn from Nama, although the State agency has yet to put them on the market, the Irish Times reported. Mr O’Flynn, the main shareholder behind Cork-based O’Flynn Construction and Tiger Developments, was one of the “top 10” developers whose loans were the first taken over by Nama when it began buying property-backed debt from the Republic’s banks in 2010.