Ernst & Young and Centre for Economics and Business Research slug it out over Ireland

Ernst & Young offer a not so rosy outlook on Ireland - but Centre for Economics and Business Research (CEBR) suggest strong return to growth in 2012....

Ernst & Young project GDP in Ireland will fall by 2.3% next year. against the European Commission forecast that Ireland's GDP will grow by 0.9% next year, while the Department of Finance’s own estimations show a growth of 1.75%......

Among the factors that would drag down the economy would be the scale of emigration, which would deplete Ireland’s labour supply, a likely raise in interest rates from the European Central Bank, and the government’s necessary spending cutbacks.

On a positive note E&Y suggest the export sector would remain steady but domestic demand will continue to slip.

Meanwhile, the Centre for Economics and Business Research has predicted a second Celtic Tiger phase of economic growth, which it says will wipe out Ireland’s budget deficit as early as 2013. They are projecting almost no growith in 2011 but suggest the country will return to growth of 7.2% in 2012 and to 6% annually from 2013.

Who's right?

Could porridge and spuds be the answer to Ireland's troubles?

We've gone from the 'troubles' to political solution and to the new 'troubles' of a different kind. In the course of the past few weeks it has become clear that Ireland spends a horrific amount in Britain on imports. Cutting the UK trade by 75% would go a long way towards solving the country's debt. The other 25%, of course should remain untouched representing the Irish in Britain originated trade (Irish to Irish or I2I trade). The way to achieve this is going back a little in time and resuming what turns out after all to be a well balanced and low cost self sufficient Irish diet. Porridge and Spuds.

The BBC reports on 'a man in the US' who's currently living on spuds. He's fit and healthy, has lost some weight and all he's missing is variety - which is where the oats come in. Of course, what the BBC fail to disclose is that this is an Irish American. Or maybe he's a fully fledged Irish man. He must be.

And it doesn't stop at food. The BBC reports that spuds are rich in fibre so there must be the possibility of making clothes from them too. And when it all gets too much there's the well known process of turning a few spuds into a little poteen. The possibilities are endless.

Where there's muck there's money! Ireland good for a punt.

It may well prove true that there's a crock o' gold at the end of the rainbow. With reality out in the open, and Ireland's government finally forced to come clean (no mean feat - and lets hope they stay that way) the time, it seems, is ripe for a punt.

The crafty Americans with their undentable optimism and unshakable positivism are already eying up Ireland as a destination for their greenbacks. The Wall Street Journal is out there championing Ireland to its readers with an article that any Irish person would do well to read. Maybe all those money outflows are not necessary after all. The safe haven might well be Ireland itself!

Go on, take a punt. You know you want to.

What should happen to Ireland's politicians and bankers?

Reckless banks and greedy developers have led Ireland down the slippery slope. Rather than rein in all the craziness, the government actively encouraged the kamikaze fools who never looked further than the pile of money in front of them and their bonuses at the end of each year.

The Government, led by ‘Fianna Failed’ and encouraged by a never ending stream of brown envelopes, proclaimed Ireland's artificial boom far and wide. Everything was done with a short term outlook.

The dismal failures are disastrous for Ireland.

What should happen to the politicians and bankers? What would you do? Do the developers share the blame and should they share the punishment?

Ireland's government - masters of the intransitive state

Confusion seems to be the order of the day (and week) with Cowen and friends seemingly unable to explain what's going on in pure and simple terms. To be or not to be? Bailout? Can the government really be like a doorsep preacher using the age old trick of getting a foot in the door? Either Ireland needs the bailout or it doesn't. The FT today sets out the state of play - but swings into uncertainty around the issue of the stance of the Irish government.....

It's time for the Irish government to make an honest statement, set out its stall and get on with the business of running the country. If the budget needs to be brought forward, so be it. Government salaries and the public service should be slashed and the out of control welfare hand-outs should be reined in. Successful industry leaders should be brought in to run the show for the next six months to one year with only oversight from the Government.

Is there a danger that an Irish Bailout will rekindle British antagonism towards Ireland?

The media are at it again. The past few days have seen increasing frequency of articles mentioning the sum of £7 billion as Britain’s contribution to an Irish bail out. Not quite a media frenzy yet – but the issue of Ireland’s debt mountain certainly is.

The war in the North ended. The Irish economy boomed. The construction sector became an unstoppable rocket boosted by recklessness of the banks and ineptitude of management, bankers and government. Had it been an export led construction rocket it would have all made sense. But no, It became a question of ‘how many stupid people can you fit into a small space?. And then the crash.

The resulting crater is greater than any excavation undertaken in the boom years of construction. So big, in fact, it is claimed that it can be seen from outer space. Herman Van Rompuy, president of the EU believes it is so big that the entire EU is on the brink and may well fall over and fall in.

Meanwhile, Brian Lenihan, Batt O'Keeffe and the rest of the Fianna Failed led government  thinks the sun is still shining. If Charles Haughy was around he may have been able to call in a few favours from friendly rich autocratic rulers who supported Ireland’s struggle against the Brits. But he’s gone and there seems few friends left.

The Germans and the French did not appreciate Cowens proclamation that they were jointly to blame for Ireland’s woes. Others in Europe were also not amused. ‘Pass the buck’ stopped in Europe after the first World War and the culture of ‘who’s responsible pays’ was ushered in. The price firmly set on Ireland now is money in return for higher corporate taxes. The Government has screwed all of us.

The mantra now in Europe seems to be towards dismantling the Irish brand – our low tax attractiveness to international business. To Ireland, the loss of a few inward investors will have a sustained detrimental effect on the economy. To Germany the loss or gain of a few inward investors is hardly water under the bridge in the scheme of things. But revenge is sweet.

The British media smells blood and we all know that blood, dirt and sex sells papers. It’ll get worse. In a bold move and one that demands all our respect, the incoming CBI chief in Britain, John Cridland, has spoken out for Ireland (we have a few friends out there still) saying that "They're very much on the mettle. They need the confidence of the markets and a bit of breathing space." A Brit to be applauded!
The fuddle continues.

The government blame the French, the Germans and the banks. The government is an innocent party. It’s not the government that needs funds, they chant. ‘It’s the banks’. The ineptitude of the government in failing to be open and honest is frightening. The failure to be effective leaders and managers is beyond comprehension.

Politics need to change. Nomination for election should be, in future, based on demonstrated competence for the job. Ministerial posts must no longer be given as favours – but the post holder should be subject to the rigours industry applies in the appointment of senior executives.
Those with any sense of pride among the Fianne Failed ranks must stand up. Time for Fianna Nua.

BBC insists Ireland EU bailout talks under way. No longer a question of 'if'.

Over the past few days various media reports have quoted many variations of comments by Cowen. The problem now with Ireland is that the Government has lost credibility. Cowen has been quoted blaming everyone but himself (including the French and the Germans) for Irelands woes. Cowen and his Government have been strenuously denying any EU bailout is on the table. But the BBC says differently and insists the bailout is no longer a question of 'if'.

It's a bit like the boy who cried wolf. Nobody knows what to believe of Cowen or the Irish government any more. Such uncertainty is every bit as bad as the stupidness and recklessness of the Irish government in recent years.

It was wrong not to plan and set aside funds for a rainy day (Ireland is a rainy country at the best of times). Equally it was wrong and reckless to bail out the banks in an undertaking that was open-ended irrespective of whether the country could afford the worst case scenario. The worst case scenario has yet to arrive and these fools have effectively bankrupted the country.

Cowen joins British Sport of anti German and anti French Rhetoric

Shame on Cowen. Rather than admit his failures he has begun to demonstrate traits of his childhood fears of failure, of not being loved enough (or at all). We all know his policies and those of his Government have failed. The consequences of his arrogance and ignorance will be felt and experienced by generations of Irish who are increasingly swelling the ranks of overseas Irish.

Rather than accept his failings, Cowen has chosen to join the British in their national sport - blame everything on the French and on the Germans. What farce and what ineptitude.

Meanwhile, in an unlikely turn of events, Ireland and China have become blood brothers - at least in the eyes of the international financial markets. Ireland's woes alongside China's plans to rein in inflation with higher rates has negatively impacted world stock markets including the FTSE. Further evidence of the impact of the Irish Chinese Alliances is seen in the fall of the Canadian Dollar, and we can expect more, much more. Sources within Aer Lingus report many TD's booking flights to Beijing and Cowen is expected to announce a twinning of Dublin with Tiananmen Square in the New Year.

Meanwhile, Cowen and his government have been thrown a lifeline from the IMF who have offered an alternative to an EU bailout - in a move that may offer better protection for Irish independence and sovereignty.

Finally, Fianna Fáil are considering anglising their name by dropping the fada to better reflect the current capabilities and performance of the party.
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Irish economy heading for a bail-out? Yield on 10-year bonds edging towards 10%. But a lifeline might not be all bad, according to the Irish Times.

Amid the many and increasing number of stories on the likelihood of a bailout, the Irish Times authors a more pragmatic summary than most. Ireland hasn't lost it's spirit yet and our ability to remain positive even in desperate times appears to have survived the years of the Celtic Boom.

Meanwhile, another story in the Times today possibly points to the underlying problem! Enterprise Ireland, created to be a 'knight in shining armour' to Irish business and industry, has become a white elephant - an old clumsy one, at that. The Times reports that Enterprise Ireland spends most of its budget on itself - €100m on admin and expenses. Less than a third of the budget reaches its target - which was supposed to be support for Irish businesses.

And in the small print is the usual 'misappropriation' of funds with the culprits including an unnamed amount by Skillsnet (referred to as 'irregularities' - but why can't they call 'theft' theft?); nearly €2m owed by Clover Meats written off; and, wait for it, Chambers Ireland have also been in the 'on the game' owing €320k. Also written off.

Not all doom and gloom in Ireland. Irish government to hand out free cheese in response to recession and may extend cheese hand-outs to emigrants (hopefully).

The Irish Times author of this article fails to grasp the real importance of free cheese and the government proclamation of 'Let them eat cheese'. Don't we all know that Irish cheese is considered an aphrodisiac? At least that's what my mother learned growing up in Mayo. So what the government is saying actually makes sense! 'Let them eat cheese' - lots of it and the resulting bliss will serve to erase all memory or awareness of recession. And who says politicians are stupid? Hopefully there are no cheese factories sitting inside NAMA.

As for all those emigrants - leaving with a pound or two of cheese will certainly provide a good start in their new lives abroad. No need for the traditional cap worn when going abroad - the one we all wore with "Kiss me I'm Irish" printed in bold green letters. A discreet nibble or two of extra stong Irish cheddar in all those new social ocassions (or even on the auld tube journey) will do much better that that, surely.

Maybe I'll go back to emigrate again!

Bank of Ireland: the financial ruination of the Catholic Church, the Free Masons and Cancer Research in Ireland!

At least financially, according to a report published today. The bank that insists it needs no help will likely be the focus of prayers in Rome and throughout Ireland in the hope it's worsening share price and the enormous negative effect it is having on the Church, Charity and medical advances can be reversed. No small matter indeed.

The management of Bank of Ireland must be extremely proud of the fact that their excellent management and business acumen saw their share price close at 43c on Friday down from a high point (2007) of nearly €19 per share. To an outsider it might appear likely that the Bank of Ireland Management went to the same school as those politicians running the country. Both seem to have performed equally well - at least in their own minds as both continue to talk positively about their achievements. Isn't it time we recognised their superb achievements with perhaps a whip around to reward them all? Perhaps a junket for all of them to some far away place and most certainly on a one way ticket.

However, those managing the investment portfolios of the Catholic Church, the Masons in Ireland and all those charitable organisations who have lost substantial sums of money must certainly also point a finger at themselves. Ireland had become one big giant pyramid scheme. If the consequences were not so serious it would be funny in the extreme.

For any organization faced with losing so much money it is damming that all of them continued to stand on the sidelines and listen to and believe all the bullsh*t the banks, the construction sector and politicians were telling us all - that ‘the only way is up’.

Don't we all know well there's a Hell down there and 'what goes up must come down'? Shame on the financial managers working for the Masons, the Church and all those charities for choosing to forget that.

Bond Trouble in Ireland - not the 007 Type - but there's a light still burning

The good old Dublin Govenment lads have run their marathon but never got to the finish line. They struggle on none-the-less. Bertie should be giving lessons on how to rein in the races and there should be a tent or two on the lawns of Leinster House. Keep the boys happy and all that.

The North is doing well. Inward investment piling in. Great big numbers on the job creation front. Economic confidence on the upswing. But down in Dublin its a different story. The State has shifted from giving enticements to inward investors to struggling to give sufficient enticements to encourage buyers to buy its bonds.

But financial woes seem to be a distant second to the real concern of the government. The voters are voting with their feet, or rather with their wings as the fly off to merry lands of opportunity elsewhere. Despite the reality of this flight of the Irish to greener pastures, Cowen seems hell bent on trying to convince those left behind that there's only a few lads and lassies gone. Not many, you understand. To acknowledge the numbers of emigrants leaving Ireland would be to acknowledge that the government screwed up.

But it's not all bleak. Ireland has the potential to produce ten times its energy needs with green energy production by 2050. There's probably a bit of the blarney in there as well as a glass ball. But the general science is there and it's indicative that there is serious potential to harness the waves and wind of and off Ireland for the common and economic good.

Ireland might well become green.

Meanwhile Irish businesses should be recruiting all those emigrating to become their envoys and (commission only) sales reps for the markets they emigrate to. Imagine that - a sales force of hundreds of thousands selling for Ireland.

Maybe Cowen should see this as the opportunity of a lifetime. Maybe he should be paying the airfares (a prayer book for everyone might be good too) of all those leaving the country. And if the money is not there for all those hundreds of thousands of airfares, give the bloody hanger to Michael O'Leary and he might agree to fly everyone out for free!

Official, a British Irish Apology!

Is this a first? Bob Geldof appears to have pulled off a spectacular achievement. His greatest ever, perhaps. What every Irishman has dreamt of for a thousand years. No, not an invite to the Queens summer party. No we are taking substance here. Major. Mighty. All powerful. All consuming. Could this be THE event of the century? Greatest event in the Millennium?
No small feat. Bob Geldof has extracted an official and unreserved apology from that 'great British institution' - the BBC.

Bob Geldof, who stood us when so many others looked away. Bob Geldof who changed what it means to give, to care and to change millions oif lives. Bob Geldof who ashamed so many governments in so many countries and who, in every respect, changed the public and governments perspective and attitudes on Africa. Certainly one of Ireland's greatest saints (Mondays aside).

And his reward? Dirty false allegations by the BBC broadcast to millions in a deliberate attempt to slur, to incite and to damage his so deserving and admirable reputation. And now an apology. That earth shaking mind boggling turn around that is so unusual to the extent that it might well constitute the first ever official British Irish apology.

Not that an apology could ever undo the harm. Certainly not sufficient. The BBC should never have broadcast those allegations. Should never have sought to prop up declining viewer numbers for a program at the expense of an individual and the organisation he has given so much to. An organisation that has achieved more than any single government has ever achieved in terms of humanity and social responsibility.

Whilst wars raged around the world, whilst governments sent their armies to kill and maim, while governments spent increasing budgets of $billions on weapons, Mr Geldof stood up and took a step ever greater than that first step on the moon. Much more profound.

And the amazing thing is Bob Geldof's response to this mind-blowing about turn by the BBC. Where most receiving such an apology would glorify it in the media, Bob has choosen to simple accept and acknowledge it - and to do so in a manner that underscores his whole persona as that of the man that changed the world. A true Irish man. See also Reuter's reporting on this historic event.

On a lighter note, Ryanair's Michael O'Leary will be a happy man this week and he may well think 'with one in the bag' he might well be next in line for an apology. Certainly he deserves one. Though his 'wit' and the way he made little of the BBC Panorama 'expose' of Ryanair must surely go down in history as one of the best comedy events ever. Whilst trying to drag this Irishman through the dirt the BBC spectacularly failed giving Ryanair its more valuable boost to its credibility instead - and showing the BBC in its true colours - a damaged organisation that is mighty only in respect to its budget.

Search Amazon.com for Bob Geldof

Who's sinking Ireland?

Foreign owned companies  in Ireland account for around 90% of exports and more than 50% of corporation tax. These companies cover medical devices, pharmaceuticals, ICT as well as back office financial services and their revenues have suffered little during the economic downturn.

Yet, recent reports show that Ireland is in hock to the European Central Bank to the tune of €260 billion and the country is sinking faster than the Irish-built Titanic.

So who's sinking Ireland? Is it the foreign companies who play tax avoidance games? Is it Irish owned businesses for whom its harder to push funds off to Bermuda? Surely all the dirt on the banks is now out in the open. But probably not. Banks and Politicians are alike. They promise the Earth and deliver little. And they are very very good at covering up.

Do politicians tell lies?

Are Irish banks rolling in gold and flush with cash? Well, yes they are flush with cash - but not anyone's cash - its all borrowed and the Irish public seem to fail to acknowledge or believe that their money is not theirs any more - its all gone.

But not according to the politicians. Yes, the guys who sold Ireland's soul and now want to sell it again. The Devil's afoot!

But Irish business struggle on. Good old Enterprise Ireland, God Bless them! (Well, there are a few good souls in there). This week has seen a delegation of Irish businesses (with a few politicians hanging on) out in the Middle East. That's the place where the streets are paved with gold,, in case you didn't know.

45 companies are currently in the Middle East on the trade mission in a bid to boost business, exports and jobs. Of course they'll bring home the bacon. The Brits and Yanks are so unpopular out there now that Ireland will be able to capitalise on the reputation of Sinn Féin and their 'friends' - and increase the mantra of 'we love the Irish'. Just don't mention the ;bacon' when ye are out there or there'll be all hell to pay - and no business. Remember that, lads. No Bacon!

Meanwhile, back at home Betfair has announced it is setting up shop in Ireland. Either they see the country as a good bet or they understand Google's love of Ireland, the Netherlands and Bermuda. One wonders if a new Irish company has been registered in Bermuda this week?

As if €260 billion in loans to Ireland was not enough, the European Central Bank has purchased even more Irish bonds - debt maturing in 2019 and 2025. It looks more and more likely that Ireland will be divied up between Germany and France in a few short years - unless the boys in Dail Eireann can get their act together...... Hopefully the Germans will remember we looked after their boys who ended up in Ireland in the 1940's and be kind to us.

The Brits are certainly out to get their revenge on us. Last week Debenhams admitted they milk the Irish with higher prices. Now Tesco are coming clean. The Brits are all at it, it seems. It's a well known fact that we Irish are generous and kind to foreigners (except immigrants from poor countries and they remind us of ourselves too much). But it seems our generousity extends to preferring to be ripped off by British stores in Ireland - where the prices are hugely inflated over the stores in Britain. Must be that they love us so much that they want to entice us to Britain in our droves where 'all will be forgotten and forgiven' and we'll be rewarded with a lower cost of living.

Whatever happened to the 'Buy Irish' campaign?

Tesco,  Debenhams and the rest of their club will not agree with the report in the Irish Times that claims 'consumer sentiment is down' the worst it has been in two years!

It's Dunnes Stores for me - if only they had a store in London!! Makes me homesick!

Cowen Constitutionally Challenged

Cowen seems to think he's in Britain these days. We all know the Irish constitution serves to limit what our politicians can and can't do. People power, we lovingly call it - though when push comes to shove, we often allow ourselves to be bullied into what the Government wants in any given referendum.

But Cowen has a new twist on the constitution - a game of 'lets pretend we are in Britain and we have no constitution'. The man clearly believes he is all powerful, all knowing and all wise. Perhaps he believes the Salmon he ate in Mayo last year was the long elusive 'Salmon of Knowledge'. Or maybe the fat and the beer is encroaching on his grey material......

And what is this all about, you may ask? More power to Europe, no less - a 'let's giv 'em it all' mentality. 'Feck the Irish, sure they don't understand these things' mentality. 'I'm the Boss' mentality.;
Are we all stupid? Crazy? Things don't seem to have changed too much since 1916 when most of the Irish population felt ok for a few brave men to go out and sort out everyone’s problems. It’s the same today. We sit and allow our hard won sovereignty to be frittered away to the whims of both the winner and the losers of the Great War – and nary a word said.
Stupid, all of us.
Our self-styled Ard-Ri Cowen has been bragging that new laws concerned with a permanent bail out fund for EU countries will not have to be ratified by referendum. The man is clearly mad, deluded and with a brain that is thicker than his belly. What we are talking about here are fundamental changes to the Lisbon Treaty (one of those treaties rammed down the throats of the Irish with worse threats than most Englishmen ever uttered against the Irish).

Rebellion? No, not so much of a whisper. Yet the implications for Ireland are not insignificant. Persistently failing to bring our finances under control will see Ireland having its voting rights suspended under the plans. Jail for all of us! Sovereignty gone. Completely.

And Cowen will insist that’s it’s ‘business as usual’. So who’s going to stand up and fight? Who’s willing and capable to challenge the status quo? Much better that we face reality now and revert to our own ‘Punt’ which served us well in previous years – float as it may. At least with that we can control our own destiny as against effectively ‘sitting in prison’ p**sing against the wall.

EU introducing a comprehensive 'innovation strategy from research to retail'

The announcement by the EU towards creating an 'innovation union' is well worth reading. The importance of the strategy is put into context in the annex of key statistics - worth mentioning here - and indicating that this is serious business for the EU in the coming years - and will impact and benefit businesses across the EU including Ireland;


Key statistics (extract from the EU press release)

• Achieving our target of investing 3% of EU GDP in Research and & Development by 2020 could create 3.7 million jobs and increase annual GDP by up to €795 billion by 2025 (Source: P. Zagamé, L. Soete (2010) The cost of a non-innovative Europe)
• The EU will need at least 1 million new research jobs if it is to reach the R&D target of 3%. More researchers are needed primarily in the business sector (Source: European Commission (RTD-Eurostat)
• Business R&D in the EU is 66% lower than the US and 122% lower than Japan, as a share of GDP (Eurostat)
• In 2008, EU-27 accounted for 24% of the total world R&D expenditure against 33% for the USA, 12% for Japan and 11% for China (Source: STC Key Figures Report 2010/2011; primary data sources: Eurostat, OECD, DG ECFIN)
• In real terms, R&D expenditure has increased by about 50% in the EU and 60% in the USA since 1995 but it has more than tripled in Asia-5 (China, Japan, South-Korea, Singapore, Taiwan). (Source: STC Key Figures Report 2010/2011; primary data sources: Eurostat, OECD, UNESCO)
• Private firms investment in R&D should be in 2020 at least €150 billion more than in 2008 for EU to reach the Europe 2020 target of investing 3% of GDP in Research and & Development. Source: European Commission (RTD-Eurostat; primary source: Member States preliminary R&D intensity targets) 
• In 2009, EU-27 produced 29% of the scientific publications in the world, the USA 22%, Japan 5% and China 17%. Of the top-10% most cited scientific publications (2007), EU-27 produced 32%, the USA 34%, Japan 4% and China 9%. (Source: STC Key Figures Report 2010/2011; primary data sources: Science-Metrix/Scopus (Elsevier)
• In 2007 both the EU and USA represented 31% each of patent inventions filed under the Patent Cooperation Treaty (PCT). By 2020, the situation is forecast to be approximately: EU: 18%; US 15% and 55% for Asia-5 (China, Japan, South-Korea, Singapore, Taiwan). (Source: STC Key Figures Report 2010/2011; primary data source: WIPO, OECD)
• An SME must disburse €192.000 of legal fees to obtain and maintain a patent protection for all 27 EU Member States. It would cost only €4.400 for a protection of the same duration in the USA. (Source: European Patent Office (EPO) and EU National patent offices, US Patent and Trademark Office (USPTO)
• Venture capital funds in Europe are at a quarter of the level in the US ((2008 data from EVCA/ Eurostat
• To date, contributions for the Risk Sharing Facility Fund of €430 million from the EU budget and €800 million from the European Investment Bank, as risk-sharing partners, have supported over € 18 billion investments (15 times the combined contribution to the RSFF and 42 times the EU budget contribution). The €400 million contribution to the CIP financial instruments up to the end of 2009 has leveraged investments of €9 billion (22 times the budget contribution), benefiting some 68000 SMEs. (Source: EIF report to the European Commission on CIPhttp://ec.europa.eu/cip/eip/access-finance/index_en.htm)
• The EU's Seventh Framework Programme for Research is the largest in the world with a budget of more than €50.5 billion, excluding Euratom, for 2007-2013.
• According to the Eurobarometer on Science and Technology (June 2010), 66% of Europeans think that science and technology make our lives healthier, easier and more comfortable.

Irish Government Naivety in 15 billion-euro ($21 billion) Spending Cuts

In a sign that Brian Cowen might have had one drink too many, the Irish government has announced swinging cuts to reduce Irelands deficit by 15 billion-euro ($21 billion) over the next four years. This by way of cuts in spending and tax increases. The government are reported to be looking to ever desparate measures in a bid to avoid the more logical solution to ease Ireland's economic woes - leaving the Euro.

Ireland’s budget shortfall in 2010 will be about 32 percent of GDP with around 20% of that resulting from the banking bail out. Recent reports in the media about abuse of Ireland's corporate tax regime (Google pays tax on just 1% of its non-US revenues through its Irish subsidiary) serve to underline that the Irish Government is focused on pleasing everyone except the Irish population. It is increasingly difficult to ignore the inability of the Irish Government to manage even basic aspects of the economy. The country clearly needs a new government - and one that reflects true business acumen.

Logic would suggest that the size of the civil service should be cut in half. Whilst it is a well known fact that it takes four council workers in Ireland to dig a hole - one digging and three supervising- the same applies to the broader civil service. The country could probably survive a 70% cut in numbers. However, rather than follow logic, the government are now reported to be considering using the country's 24 billion euro ($33 billion) state pension fund to buy Government bonds. The politics of desparation! To sustain such a move would likely require civil servant numbers to be maintained or even increased. SO the government would in effect be buying its own bonds. Such a move will worsen Ireland's credit rating resulting in increased borrowing costs - and prolong any possibility of economic recovery.

With such substantial cuts and tax increases on the way, emigration figures will surge hugely in coming years leaving a shrinking population to face the burden of an ever increasing debt.

Beware: Britains Bribery Act will have major implications for London-listed Irish companies

A well rounded article in the Irish Independent draws attention to the dangers ahead for London-listed Irish companies which include well known names like Tullow Oil, Kenmare Resources, Petroneft, Petroceltic and Petrel, and Glanbia (no evidence of wrongdoing against any of these).

Britains Bribery Act is due to come into force in April 2011 - giving little time for London-listed Irish companies to move to other exchanges. The Act carries a  new corporate offence of "failing to prevent bribery" whereby a  company can be liable where it fails to stop a bribe by an "associated person". The doors is wide open and includes employees agents, partners, intermediaries or subsidiaries. So if you want to ***k your competitor, get the cash out and hand it out with a few of your competitors business cards. Task done, tip off the authorities and sit back and relax.That'll do nicely. Then go in behind and do things the right way to pick up the vacated business opportunity.

How ridiculous business has become. WTO, EU, the US and more - all looking for ways to stymie business under the guise of opening up markets. How to make a payment under the desk, how to determine whether its necessary to oil the wheels and how to share rewards is as much fun and part of the game as is signing the contract.

Will it work? No. It will create more middle men and ultimately it will push up the cost of doing business. Instead of one well placed payment, everything will have to be in the open. More use of ‘advisers’ tax on any payment will have to be factored in making the payments higher. Because it will all be in the open we will increasingly see that more will want more. An Irish company doing business in developing countries will likely end up having to pay the president’s brothers because they see that their cousins are being employed as consultants or advisors. Then the president will also have to be paid because all his family are getting rich – and he costs more.

Some things are best left alone and the business success of Irish companies in difficult economies is not always down to history – but rather can sometimes be down to how well you know your friends and how to ensure they look after your interests alone. I expect we’ll see more Irish businesses avoiding London listings in years to come.

But all this is pure speculation, of course. It’s the luck of the Irish that wins the deals, as we all know!

Bank of Ireland uses bail out funds to stick two fingers at the Irish constitution

In a move that will delight Unionists and any survivers of the Irish Farmers Party, Bank of Ireland has announced it has created a UK wholly owned subsidiary into which it will transfer its business in the north of Ireland. Surely this is constitutionally questionable - particularly that the bank has been bailed out with public funds.

So we seem to be going backwards. Integration of the whole of Ireland is a cornerstone of the Irish constitution. For an Irish businesses, particluarly one with a government stake, to separate its business in the north and put it into a UK subsidiary is unbelievable and will turn many a patroit in his grave.

It is understandable to create a British subsidiary to encompass those parts of Bank of Ireland that reside and operate in Britain. But Ireland is Ireland and any business in Ireland should remain as part and parcel of the Irish business operation. Does the peace process mean that we are all afraid now to voice any concern about anything?

The Irish are drinking and smoking less, as austerity measures bite - much to the chagrin of the tabacco companies and SOFT drinks manufacturers

No, the headline is not wrong. The Irish are drinking less than they did before. But it's not the Guinness that's suffering. No, the black stuff is still flowing. Its the soft drinks industry that's suffering.

Britvic, who produce Ballygowan, Club soft drinks, Pepsi and other brands for the Irish market is feeling the pinch. Sales are down across the board by nearly 9% on the past year resulting in a significant drop in profits. The company is planning to reduce its 800 strong workforce by 160 as a result.

Meanwhile cigerette smoking is following Britvic in the market. PJ Carroll reports a 60% reduction in profits on a market reported to consists 4.5 billion cigerettes in the year - down from 5.1bn. That seems like an awful lot of cigerettes for the size of the populations - yet the company believes there is an additional substantial grey or black market.

Rumours abound that the government is handing our cigerettes to farmers for their cattle and pigs on the back of EU subsidies. Scientists report that the incidence of tabacco adiction in farm animals in Ireland is increasing.

It used to be an issue with pigs feeding on cigerette butts (improves their digestion and reduces greenhouse gases) but now more and more animals are chewing tabacco and there are signs of major increase in mouth cancer in cows and pigs in particular.

Now where did I leave my bottle of Jemesons? I could have sworn I saw my great grandmother , Mary, passing the window just now - and I'm on the fourth floor!

Debenhams in Ireland - over the odds pricing strategy pays off, Irish shoppers pay the bills

Like several other British retailers in Ireland, the strategy of overcharging for goods (well above like for like pricing in the UK stores) is paying dividends - literally. As one might expect in tough times, overall revenues for Debenhams have fallen €10m in the past year. But for all of you Debenhams Irish shoppers out there, you will be more than happy to learn that your willingness to pay substantially higher prices than shoppers in Debenhams British stores, the company is in fine mettle overall.

Debenhams reports that headline pre-tax profit in their Irish stores in the year to end August 2010 jumped almost 21pc to £151m. Net debt was reduced, from £517m to £73.5m. According to the company, the figures represent an increase in headline profit before tax of more than 20pc on a one-year basis and 37pc on a two year basis.

No wonder that Ireland was recently recognised as being one of the most generous charitable givers per head of population in the world. But surely it's time to rein in the ropes. Demanding fair and equitable prices by ALL British retailers in Ireland should become a priority. Who's going to make the first move?

It's off to Dunnes for me. More later!

'Destigmatised' feminism coming to a village near you!! The Irish Revolution V2.0

It's prime time for 'Cork Feminista', 'Belfast Feminist Network ' and very many more. The Irish Times reported last week on a strange phenomena sweeping Ireland. And it’s not written any date near the 1^st April!  

An escape from the traditional dirty, unfashionable feminist agenda tainted by populist caricature of man-hating, bra-burning and regulation hairiness. Feminist activism hits the streets to fight - with hordes of angry, impassioned young women who are planning to have a book club, a film club, a discussion group and ‘feminism in the pub'.

Not a mention of 1916 anywhere! This is the future. An organised movement of women who want to reclaim feminism, to challenge the preconception that feminists see sex as evil and men as bad. That's good, surely?

The question, of course, is - will we see all this reflected in Irish business over the coming years. Will there be a business as well as social impact - or will it all peter out to be replaced by a destigmatised something else?

"Double Irish" and the "Dutch Sandwich" (how to p*ss off the taxman)

An insightful report by Bloomberg this week lends valuable insights on Google's tax structure, reporting the company pays just 2.4% corporate tax on its entire turnover outside the US! Obviously some lessons to be learned for all of us.

Bloomberg's report details that Google's Dublin-based operation, with a small team of 2,000, is responsible for 88 percent of the company's $12.5 billion in sales outside the U.S. That's obviously not bad on a measure of income per employee.

The really interesting part is that the company has saved $3.1 billion since 2007 and boosted last year's overall earnings by 26 percent through its tax structures.

And in a hint for those interested, the article draws reference to the final destination of Google's overseas profits. Bermuda - where there is no corporate tax.

Google pays tax on just 1% of its profits in Ireland. That's 12.5% of 1% profits on 88% of its €12.5 billion in overseas sales! (apologies to those of you who did not pay attention in maths class)

For all interested to learn how a corporate rate of 12.5% tax in Ireland equates to an overall corporate tax bill of just 2.4% - here's the route to follow.

The process is known as "Double Irish" and the "Dutch Sandwich." Which probably says all you need to know. (No, its not a description of certain intimate positions).

For clarity, in the case of Google - income from non-US clients (i.e. paying for search ads) is sent to Ireland. That starts a baton race of 'touch and go' - the money 'touches' Ireland, but does not stay (important/critical step). Next stop the Netherlands, because Ireland makes it difficult to send money direct to Bermuda.

There, the money passes through Google Netherlands Holdings - a shell company with no employees. From there, 99.8% passes on to Bermuda - and wait for it!!!!!! The Bermuda company is an Irish company! That's the 'double Irish' bit. The 'sandwich' refers to the Dutch bit in the middle.

So, the 12.5% Irish corporate tax rate may be a myth after all! Except for all those suckers who just pay up.