Wednesday 25th March 2015
Ireland’s economy ‘starting to fire on all cylinders’, says an IMF report
Annual assessment of Irish economy shows healthy economic growth despite high unemployment and widespread mortgage arrears
Irish economic growth is expected to be a healthy 3.5% in 2015, the IMF report shows.
Ireland’s economy is “starting to fire on all cylinders”, but the scars of the crisis are still visible in high unemployment, widespread mortgage arrears and house prices 38% below their peak, according to a new report by the International Monetary Fund.
In its annual assessment of the Irish economy, known as an Article IV, the IMF charts the country’s successful emergence from the deep recession of 2008 and 2009. Irish economic growth is expected to be a healthy 3.5% in 2015, slowing to 3% next year, much of it led by exports.
“Ireland’s recovery is off to a good start in 2013–14, with some of the adverse legacies from the crisis beginning to heal,” the IMF finds.
Unemployment has fallen from a peak of 15% to 10%, but remains well above the pre-crisis level of 4.5%. House prices have bounced back, rising at 16% a year, as fast as during the boom, but they are still 38% below the dizzy heights of 2008.
After more than five years of spending cuts, the deficit on public finances should hit 3% of GDP in 2015, the IMF predicts, which would allow the country to leave the EU’s “excessive deficit procedure”.
While Dublin was subject to the strictures of the “troika” of the IMF, the European Commission and the European Central Bank, which oversaw its €67.5bn bailout loan, its creditors were often accused of driving it into austerity.
The IMF, however, uses its report to urge Dublin to be cautious about the pace of future spending cuts, lest it choke off growth. It argues for a “phased and steady adjustment, allowing a continued build-up of the fiscal space while supporting the recovery in the near term.” The government left the bailout programme in late 2013.
Irish consumers have also worked hard to pay down their debts, mainly by slashing their savings ratio, the share of their income they put aside for a rainy day. Almost 15% of mortgage borrowers are still in arrears; however, and the average household has debt worth 177% of its annual income – very high by both historical and international standards.
The IMF cheers Ireland’s strong record of growth since it emerged from its international bailout in 2013, but points to the significant role of “contracted manufacturing”, under which multinationals score production in Ireland for tax purposes even though the goods may never cross the Irish border. The practice may have added as much as two percentage points to GDP in the first three quarters of 2014 alone, the IMF calculates.
Dublin insisted on maintaining its 12.5% corporation tax rate, unusually low by international standards, throughout the crisis negotiations with its international creditors.
Windfarm locals must be given energy policy role, Alex White says
Minister for Energy says citizens need stake for Ireland to meet targets on renewables
Minister for Energy Alex White has said that local people affected by windfarms must be given a ‘genuine stake’ in energy policy decision-making for Ireland to meet its targets on renewable energy.
Local people affected by the erection of windfarms must be given a “genuine stake” in energy policy decision-making if Ireland is to succeed in meeting its renewable energy targets, the Minister for Energy Alex White has said.
Mr White said the issue of consultation will be addressed in the White Paper on energy policy which is being prepared for publication later this year.
Speaking at the annual conference of the Irish Wind Energy Association (IWEA), Mr White said wind was now generating 16.5 per cent of all electricity demand in Ireland, but there was “quite clearly plenty more to do” if Ireland was to reach the EU target of having 40 per cent of electricity generated from renewables by 2020.
Mr White said the majority of Irish people are concerned about global warming and welcome the idea of a cleaner energy system.
However, Mr White also noted the “deep concerns” of local people about the effects that wind turbines will have on their lives.
Mr White said: “It is up to us . . . that our citizens have, and feel that they have, a genuine stake in our energy future.
“It is up to us, Government, industry and advocates, to make this happen by maximising the opportunities for citizens to participate in the transition to a carbon-free future.”
Mr White said it was important to locate wind turbines in areas that are compatible with the environment.
A survey carried out on behalf of the industry found that 70 per cent of Irish people either agree or strongly agree that wind energy contributes positively to the national economy.
Some 30% neither agreed nor disagreed with the proposition, while 7% either disagreed or strongly disagreed.
Some 69% agreed that wind energy has a positive impact on the environment, while 81% of respondents believed it was important for Ireland to have its own secure source of energy.
The survey was carried out by Empathy research based on a representative sample of 1,093 Irish adults.
A report commissioned by IWEA in relation to the benefits of wind energy stated that each house would be €26 better off every year if Ireland meets its renewable targets by 2020.
The report found that new data centres, such as the one being built in Athenry, Co Galway by Apple, could increase electricity demand in Ireland by 900 megawatts a year.
Young people in Ireland are happier now than a decade ago
Young people are happier and healthier than a decade ago but social inequalities are impacting more on poorer adolescents’ health, research has found.
The results of health and social studies across 40 countries in Europe and north America, compiled in collaboration with the World Health Organisation, show overall improvements in the wellbeing of 11 to 15-year-olds between 1994 and 2010.
The Irish study partners at NUI Galway’s health promotion research centre say that, while there have been positive developments, issues about social inequality are a worry.
“Of real concern must now be the increases in social inequalities in Ireland, where children from poorer homes are more likely to report ill-health, and the gap between rich and poor has increased over time,” said NUIG senior lecturer in health promotion Saoirse Nic Gabhainn.
This inequality has increased significantly in only four other countries — Austria, Canada, France, and Lithuania — out of 37 where the relative risk of at least two health complaints a week among children in low-wealth families was measured.
Over the last decade in Ireland, there has been a decline in school-aged children drinking alcohol weekly and in experiencing multiple injuries. Self-rated health and ease of communication with parents have improved, but the study found increased pressure from school work and no reductions in bullying.
Ms Nic Gabhainn said policymakers can use the findings, published in The European Journal of Public Health, to ensure their decisions are effective.
Oldest Irish woman to make history at midnight tonight
In just a few hours, the oldest living person born in Ireland will make history and become the longest living Irish person ever.
Kathleen Hayes Rollins Snavely turned 113 last month, making her the oldest Irish person alive today.
Tonight, she will break a record by becoming the oldest person ever to be born in Ireland, overtaking Annie Scott, who was 113 years and 37 days old when she died in 1996.
Clare-native Kathleen was born in Feakle in 1902. She emigrated to America in 1921. Today, Kathleen is “hard of hearing but clear of mind” and has lived an extraordinary life.
She has been a resident of The Centers at St. Camillus in Syracuse, New York for a short number of years.
Kathleen marked her landmark birthday with a small party in her nursing home, which was attended by family and close friends.
“I thought it was intimate and nice, right at the home where she is – a mixture of people who have known her for years, people from the Francis House, Sean Kirst and his wife,” said Dave Liddell, a friend of Kathleen’s at the party.
Lidell has known Kathleen for 30 years and says “once she opens up and becomes part of the group she enjoys expanding and telling stories.
“She’s warm and cheerful and thoughtful of others, that comes through in a lot of the things she says.
“She’s very intelligent even though her education was somewhat limited, leaving Ireland so young, and she’s still sharp as a tack even though she has relinquished some of her physical vitality.
“And she’s Irish through and through.”
Kathleen doesn’t like sensationalizing or being defined by her age.
Having reached 113, Kathleen is often asked about her secret to longevity – it is a subject she hates to discuss.
“I get so tired of people asking me about my secret. I’ve got no secret,” she told Sean Kirst of Syracuse.com.
“You live and you do it the best you can.”
She finds questions about her age can often be rudely delivered.
“Someone came up to me in the cafeteria and said to me, ‘How old are you anyway?’ I said, ‘I’m old enough to have some manners.’”
Kathleen’s memories of the past 113 years focus on her personal life, rather than historic events.
“I’ve forgotten a lot of history,” she says. “I’ve been living my whole life. I didn’t think I’d need to remember these things.”
However, she remembers the night she left Ireland and the advice she gave to her two younger brothers: “Work hard and you be careful about drinking and grow up to be someone to be proud of.”
Many decades later, she offers new advice: “You can’t go through life thinking you’re better than the other guy.”
Last year, her adopted home of Syracuse declared March 17 Kathleen Snavely Day, to honour the popular resident.
Back in Clare, Peggy Hayes, the widow of one of Kathleen’s cousins, says she was told that Kathleen “left young and did well, and that she was from a long-living family”.
She was born on February 16, 1902 to farmer and publican Patrick Hayes and his wife Ellen.
Kathleen’s birth certificate
Kathleen worked as a business apprentice in Ireland, before boarding a ship in 1921 and sailing from Cobh to Ellis Island at 19-years-old and with just $25 in her pocket.
She left the country in the midst of the War of Independence to live with her mother’s brother, Jeremiah Moroney, in Syracuse.
She worked at a state school for people with developmental disabilities and then found employment at E.W. Edwards Department Store.
She later set up a shop with her first husband, Roxie E. Rollins. “Neither of us had a formal business education,” she said
“We learned on the job, through experience. If you have a feeling for management and enjoy it, experience will give you the skills.”
She says they “were very much in love. It was the secret of our success.”
Roxie died in 1968. In December, 2000, she honoured his memory by making a gift of $1 million to the Syracuse University School of Management.
“I can’t think of anything that would please him more than supporting a cause that would help other ambitious young people like us.”
Two years after Roxie’s death, 68-year-old Kathleen married her second husband, Jesse Clark Snavely, Jr.
Ireland’s SMEs and banks to remain ‘economic bedfellows’
Despite the growth in alternative sources of finance, SMEs cannot but rely on banks to provide credit, the deputy governor of the Central Bank said
Despite new and welcome initiatives to diversify sources of funding, SMEs cannot but rely on banks to provide the credit they seek to function and expand, deputy governor of the Central Bank Cyril Roux told the audience at an event for the Leinster Society of Chartered Accountants on Wednesday.
Despite the growth in alternative sources of finance, Ireland’s SMEs and banks are to remain “economic bedfellows”, the deputy governor of the Central Bank said on Wednesday.
“Despite new and welcome initiatives to diversify sources of funding, SMEs cannot but rely on banks to provide the credit they seek to function and expand,” Cyril Roux told the audience at an event for the Leinster Society of Chartered Accountants.
While he recognised the importance in developing alternative sources of finance for small and medium sized businesses, noting that investment vehicles such as the Ireland Strategic Investment Fund and the Strategic Bank Corporation of Ireland are “welcome additions” to the funding mix, he said that banks will remain the most important source of finance.
“While there are fledgling new avenues of non-bank lending, Irish SMEs will rely on banks to function and to grow for many years to come”.
Peer to peer lending, whereby individuals lend to small businesses, will, at best likely be “a marginal source of funding”, Mr Roux said.
“Rules around the protection of investors that have been painstakingly developed in the markets, securities and fund industry are missing and so are time and tested processes and procedures to assess the creditworthiness of borrowers, to ensure professional collection, and to devise and implement workouts of non-performing loans,” he said.
Lending by investment funds, following the introduction of domestic regulation for loan originating funds last year, is also a possibility, but “time will tell the place it will take in the market for SME lending,” he said.
Recognising that creating the right environment for SMEs to prosper is “of vital importance to the economy”, said that non-performing loans remain an issue, but that it “will take time” to resolve..
“Commercial loans still make up the sizable majority of distressed loans in Ireland and will take time to work through, even with an improving economic outlook,” he said.
As part of the bank’s implementation of the Single Supervisory Mechanism (SSM), the regulator created a division dedicated to the performance of on-site inspection. This new division is now set to perform a programme of credit risk and other inspections, Mr Roux said.
“We expect that the inspection teams will be on-site in our largest credit institutions throughout the year with targeted inspections taking place in other institutions based on our risk assessment.”
With respect to new lending, Mr Roux said that it has conducted a number of inspections, and it will receive first reports from this work in the coming months.
“Overall, we are satisfied that governance and underlying standards are much improved relative to the crisis”.
An American astronaut and Russian cosmonaut leaving Earth this week for a year in space
An American astronaut and Russian cosmonaut will leave Earth this week and move into the International Space Station for an entire year.
Scott Kelly and Mikhail Kornienko begin their marathon mission with a Soyuz rocket launch from Kazakhstan early Saturday — Friday in North America. They should arrive at the orbiting outpost six hours later.
It will be NASA’s first stab at a one-year spaceflight, a predecessor for Mars expeditions that would last two to three times as long. The Russians are old hands at this, but it’s been nearly two decades since a cosmonaut has spent close to a year in orbit.
Five things to know about the duo’s extraordinary endeavours:
Both Scott Kelly (left) and Mikhail Kornienko have lived on the space station before. No-nonsense former military men, they were selected as an astronaut and cosmonaut in the 1990s. Kelly, 51, is a retired Navy captain and former space shuttle commander. Kornienko, 54, is a former paratrooper. The pair will blast off with Russian Gennady Padalka, a veteran spaceman who will spend six months at the orbiting lab.
Kelly and Kornienko will remain on board until next March. During that time, they will undergo extensive medical experiments and prepare the station for the anticipated 2017 arrival of new U.S. commercial crew capsules. That means a series of spacewalks for Kelly. They also will oversee the comings and goings of numerous cargo ships, as well as other Russian-launched crews. Soprano superstar Sarah Brightman will stop by as a space tourist in September.
Doctors are eager to learn what happens to Kelly and Kornienko once they surpass the usual six-month stay for space station residents. Bones and muscles weaken in weightlessness, as does the immune system. Body fluids also shift into the head when gravity is absent, and that puts pressure on the brain and the eyes, impairing vision for some astronauts in space. Might these afflictions peter out after six months, hold steady or ramp up? That’s what researchers want to find out so they can protect Mars-bound crews in the decades ahead.
NASA’s scientists couldn’t resist when Kelly’s identical twin brother, Mark, a retired astronaut, pictured above, agreed to take part in many of the same medical experiments as his orbiting sibling. Researchers are eager to see how the space body compares with its genetic double on the ground. They won’t follow the same diet or exercise regime, however. Mark said he has no intentions of consuming bland space-type food or working out and running two hours a day on a treadmill, as his brother will be doing.
NASA and the Russian Space Agency announced Kelly, pictured far right, and Kornienko, far left, as the one-year crew in late 2012. This will be new territory for NASA, which has never flown anyone longer than seven consecutive months. The Russians hold the world record of 14 months, set by a physician-cosmonaut aboard the former Mir station in 1994-1995. Several other Russians spent between eight and 12 months at Mir. All but one of those long-timers are still alive. They will be accompaniedon the launch by Gennady Padalka, middle.