Saturday 20 December 2014

The Punt: Worse than the great crash

Published 23/08/2014 | 02:30

Taoiseach Enda Kenny pictured  during  the the media briefing on the Tenth Quaterly progress report on the  Action Plan for Jobs , at Government Buildings.
24/7/14
Pic Frank Mc Grath
Taoiseach Enda Kenny

'It's time to call the euro zone what it really is: one of the biggest catastrophes in economic history.

"It's a policy-induced disaster. Too much fiscal austerity and too little monetary stimulus have crippled growth like almost never before. Europe is doing worse than Japan during its 'lost decade', worse than the sterling bloc during the Great Depression, and barely better than the gold bloc then - though even that silver lining isn't much of one."

Ouch. The Washington Post's Matt O'Brien doesn't hold back in his assessment of the outlook for the euro zone.

Criticism of European leaders - including our own - is growing, especially in the US.

That is likely to continue, especially after confirmation this week that growth in the euro area is now non-existent.

American economists are increasingly arguing that Europe's flat-lining economy is proof that the medicine isn't working.

Writing on the Wonkpost economics blog, Matt O'Brien reckons it has now taken Europe longer to recover from the 2007 financial crisis, than the great crash of 1929.

Slow Irish burner for Aga

It's nearly eight years since UK-based Aga Rangemaster acquired Waterford Stanley, the maker of cast iron cookers and stoves.

With the crash came difficult times and cast iron cookers quickly fell way down the list of consumers' priorities. The company rationalised its Waterford facilities last year. Releasing an interim report yesterday, Aga Rangemaster said that the climate in Ireland for its products continues to be challenging.

Indeed, an otherwise reasonable performance on a group basis in the first six months of the year was partly offset by its weaker business in Ireland and elements in the United States. Total group revenue for the period climbed 3.3pc to £123.5m (€154m). Two-thirds of that was generated in the UK, where sales grew 9.7pc.

"The slow Irish cooker market combined with a mild winter meant that the benefits of last year's rationalisation of our Waterford sites were absorbed by having to operate at lower production and sales levels. Waterford Stanley made a first-half loss," it adds, noting that a new managing director was drafted into the unit and that it has plans to return to profitability in the second half.

Looks like a slow burner for now.

Required 
reading indeed

China looms ever larger on the horizon of Irish businesses. Having been seen by many primarily as low-cost manufacturing base the country is growing as an export destination for Irish firms and as a source of capital.

In fact the growth in two-way trade between the two countries has prompted the launch of glossy new magazine title the Ireland-China Journal.

Its 100-page debut edition is groaning with heavyweights. The foreword is written by Taoiseach Enda Kenny, pictured, and there are interviews with Chinese Ambassador to Ireland Jianguo Xu and his opposite number Paul Kavanagh.

The journal is very much business focused - including a feature with Elaine Coughlan, a co-founder of Summit Bridge Capital, the €75m China Ireland Tech Growth Fund which is backed by China Investment Corp and the National Pension Reserve Fund of Ireland.

Amazingly, the new journal is available free online and will also be at pick-up-points in locations including Dublin Airport - so there is no excuse not to have it read by the time you touch down in Hong Kong.

Irish Independent

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