Tuesday 26 September 2017

Business week in 60 seconds

Central Bank governor says troika gave us 'safe harbour'

Colm Kelpie

Colm Kelpie

International confidence in Ireland may have returned, but Central Bank governor Patrick Honohan highlighted the toll of the financial crisis on the public on Friday when he said there had been a substantial increase in the proportion of poor households suffering deprivation.

However, he backed the work of the troika, giving them qualified support for their efforts. ''My overall impression is that most of the specific measures urged on the Government by the troika staff as the programme unfolded were sensible or inevitable; few were really bad ideas," he told an economics conference in Dublin, organised by the European Commission.

The bailout programme did what it set out to do, he said. It provided the State with a safe harbour in which to retreat to deal with the financial crisis and chart a way forward.

INVESTORS BUY IRISH RECOVERY

It's been a good week for the National Treasury Management Agency. The State's debt-management body managed to sell almost €4bn worth of bonds on Tuesday in the first test for the country since leaving the warm embrace of the bailout programme.

The auction was more than three times over-subscribed, reflecting the increase in investor confidence internationally, with demand even coming from the Middle East.

It was the culmination of months of graft by NTMA officials who travelled far and wide to woo investors and sell the Irish recovery story.

ANGELA TAKES A TUMBLE

"Great empires have been governed from the bed," said the English philosopher Francis Bacon.

German Chancellor Angela Merkel had to do just that this week after she took a tumble while skiing during her end-of-year sojourn.

The chancellor and her husband like to spend the Christmas holidays in Pontresina, near St Moritz. Her spokesperson says she normally takes it easy on the slopes, but she nevertheless slipped. Apparently she thought it was simply a bruise, but an X-ray revealed a fracture.

Her plight earned her some sympathy, but it's unlikely that she'll take it lying down.

BOOST FOR TRACKER HOLDERS

TRACKER mortgage holders got a bit of a boost on Thursday thanks to ECB boss Mario Draghi.

The ECB boss kept interest rates unchanged at record lows, but crucially, he didn't close the door on future cuts.

And that's good news for those on the ECB-linked home loans. Mr Draghi warned the eurozone would continue in a prolonged period of low inflation, ensuring that interest rates remain at the same level or lower for the foreseeable future.

The ECB surprised the markets when it reduced its core interest rate last November. Around 375,000 holders of tracker mortgages gained from that. It meant a saving of about €30 a month for a mortgage holder with a home loan of about €250,000.

CHINA TAKES CROWN FROM US

The world's second largest economy has taken a further step towards overtaking the planet's economic superpower.

China claimed this week that it was ''very likely'' that it had overtaken the US as the world's top trading nation -- a title the US has held since World War II.

The sprawling Asian nation of more than one billion people has already been projected to take over the US as the world's biggest economy by about 2030.

China became the world's biggest goods exporter in 2009. Its imports have also risen amid an expansion in its economy. The US will be watching the data closely in the coming months.

Irish Independent

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