Ireland

Ireland received a significant boost in its bid to seek an extension to the maturities of its bailout loans last night after finance ministers of the countries that share the euro currency backed the deal, the Irish Times reported. Finance ministers from all 27 EU states will consider the issue at a scheduled meeting in Brussels this morning, which is being chaired by Minister for Finance Michael Noonan.

The former head of the defunct Anglo Irish Bank will face a second trial connected to Ireland's most expensive banking failure, charged with misleading auditors, a Dublin court heard on Friday, Reuters reported. Sean FitzPatrick, who oversaw the rapid rise and stunning fall of Anglo, is already due to be tried on fraud charges next year. He is the highest-profile banker to be charged in connection with the financial meltdown that dragged Ireland into an 85 billion euro ($111 billion) international bailout.

Since the downturn, a series of Irish passport holders have opted to declare themselves bankrupt in Britain. The difference between the two jurisdictions is stark: in Ireland, bankrupts may be faced with up to 12 years of financial purgatory. In the UK they can be clear after one year, The Guardian reported. After initially attracting Germans, who face a minimum of six years in bankruptcy, the British system soon received an increasing number of Irish people.

Euro zone governments are discussing ways to help Ireland and Portugal return to the capital markets swiftly and some among them have voiced a preference for delaying the repayment of bailout loans by the two states, sources familiar with discussions said yesterday, the Irish Times reported. The sources quoted from a 15-page discussion paper from the European Commission and the European Stability Mechanism that was debated last week by deputy finance ministers from the euro zone.

AIB, Bank of Ireland and Permanent TSB will no longer have to pay up to €1.1 billion a year to the Government in fees for the bank guarantee scheme following the announcement yesterday that it will end on March 28th, the Irish Times reported. The Minister for Finance Michael Noonan said the “time was right” to end the controversial guarantee, which was introduced on September 30th, 2008, to prevent the collapse of the Irish financial system. He said this decision, which had been well flagged by the Government, would help the three banks to “get back to normal”.

The European Commission is “closely monitoring” Ireland’s credit union sector, EU commissioner Olli Rehn said, as a report warned that credit unions could have a negative impact on the country’s deficit in the coming years, the Irish Times reported. The European Commission’s winter economic forecast published yesterday predicts that Ireland’s fiscal deficit is expected to come in at 7.3 per cent of GDP this year and 4.2 per cent next year, but these figures could be increased due to financial sector support measures, including the resolution of certain credit unions.

Staff at Independent Newspapers will have their pension benefit almost halved under management proposals to address a €155 million funding shortfall, the Irish Times reported. The plan is part of a dramatic ongoing restructuring of the business over recent months. Management say its success depends on workers realising the “weakness of their legal position” and a possible alternative scenario that could see the “failure” of the group.

The involvement of the Irish Central Bank in the promissory deal is "problematic", Germany's Bundesbank said in its monthly report Monday, the Irish Times reported. The German central bank highlighted what it described as "the increasingly stronger and more problematic inter-linkage between monetary and fiscal policy in the European monetary union". "The European Stability Mechanism, which should be responsible in this regard, has been established to provide any help to individual member states in servicing debt," it said.

This week’s report by the Organisation of Economic Co-operation and Development on multinational taxation may make uncomfortable reading for some Irish policymakers, the Irish Times reported. This is particularly so when you read the examples given in Appendix C of the report, where the authors describe some corporate structures designed to help multinationals avoid taxation. The structures outlined are familiar to those who read about such matters and know what is meant by the “double Irish” and the “Dutch sandwich”.

Household financial distress is at unprecedented levels as seen in the extraordinary rates of arrears in owner-occupied mortgages, according to Central Bank governor Patrick Honohan. Speaking at the bank’s conference on distressed property markets this morning, Mr Honohan said negative equity is not a rationale for debt relief and that the bank will be "ramping up" its contact with financial institutions that have been "behind the curve" in addressing mortgage arrears, the Irish Times reported.