Ireland

The High Court has confirmed an examiner to B&Q Ireland Ltd, which operates nine home improvement stores employing 690 people, of whom 500 are part-time workers, the Irish Times reported. As part of further cost-cutting proposals, the company’s two stores in Athlone and Waterford would close with the “regrettable” loss of 92 jobs, Mr Justice Peter Kelly noted. A key ingredient for the survival of some of the company’s other stores includes renegotiation of what he described as “extraordinary” rents.

Everybody seemed to be talking about monetary financing of debt last week – the ultimate taboo in monetary policy. And hidden behind a veil of unbelievable complexity, the eurozone may have done just that, the Financial Times reported. Various European central bankers rushed to proclaim that the agreed rescheduling of Ireland’s so-called promissory notes would not set a precedent for sovereign debt laundering. In legal terms, the agreement is probably watertight. It may be a borderline issue, but who cares? In economic terms, the situation is much clearer.

Euro zone finance ministers meeting in Brussels will discuss the workings of the euro zone’s rescue fund, the ESM, though any discussion on its application to AIB and Bank of Ireland is likely to be some months away, the Irish Times reported. While the issue of legacy assets was discussed by euro zone finance ministers last month, senior EU sources have indicated the issue has been put on the back burner, and serious consideration of the question of retrospective recapitalisation will not be on the agenda until April at the earliest.

Financial benefits resulting from the agreement on bank debt does not necessarily equate to an alleviation of austerity, the secretary general of the Department of Finance has suggested. John Moran said that breathing space created by last week’s deal provided the Government with options for forthcoming budgets. But it does not automatically mean a dramatic shift in the State’s approach towards reducing the deficit, the Irish Times reported. “You basically have a choice with respect to the money that you are no longer spending,” he said.

Liquidators will be appointed to the Irish Bank Resolution Corp, following the introduction of emergency legislation in the Dáil shortly after midnight by Minister for Finance Michael Noonan, the Irish Times reported. The legislation was drafted as part of a deal with the European Central Bank (ECB) that will result in a major improvement in the terms of Ireland's bank debt. The ECB's governing council will discuss the deal today at its monthly meeting in Frankfurt.

Irish Prime Minister Enda Kenny said on Thursday that a new schedule for repaying debts incurred in support of the country's stricken banks will reduce his government's borrowing needs over the next decade and cut its budget deficit by €1 billion ($1.35 billion) a year, The Wall Street Journal reported. He told lawmakers that under a plan that had been discussed with the European Central Bank, the government will exchange new bonds with maturities of as long as 40 years for existing promissory notes with an average duration of between seven and eight years.

An attempt by Ireland to ease its debt burden was thrown into disarray early on Thursday as the government scrambled to introduce emergency legislation to liquidate Anglo Irish Bank, the failed lender, without having secured a key debt swap deal with the European Central Bank, the Financial Times reported. The government had intended to announce the liquidation of the bank alongside a deal with the ECB on replacing €28bn in costly promissory notes, used to bail out Anglo Irish in 2009.

European Central Bank president Mario Draghi has said the Eurosystem offered "extraordinary" assistance to the Irish banking system in recent years, the Irish Times reported. Mr Draghi said the body would continue to discuss with Irish authorities "what may be achievable" with respect to the promissory note on the Irish Bank Resolution Corporation (IBRC), the former Anglo Irish Bank. He was responding to a letter on January 7th from Fianna Fail spokesman on finance Michael McGrath in which he urged some progress on a deal.

DIY chain B&Q Ireland Ltd has been placed into interim examinership following a hearing at the High Court Thursday, the Irish Times reported. This gives the company protection against its creditors for up to 100 days while the DIY chain attempts to restructure the business and formulate a survival plan to put the business back on a viable financial footing. Under a proposed restructuring, stores in Athlone and Waterford – which employ 92 staff between them - would close. B&Q will also attempt to substantially improve its rental agreements with landlords.

Irish banks are still dragging their feet when it comes to dealing with mortgage arrears, the Central Bank has warned. In its first quarterly bulletin of the year, the bank said lenders were not doing enough to tackle “the long-term nature” of arrears, the Irish Times reported. While acknowledging that more debt resolution measures were being rolled out by banks, the Central Bank said the level of implementation, through either debt restructuring or loan recovery, was far from adequate.