Wednesday 13 December 2017

TH€ PUNT: A bit early for the optimism

THE Punt struggles to understand the sunny confidence shown by the Department of Finance's latest growth estimates for the Irish economy, when our major trading partners are either in recession or on the brink of recession.

The economists can use all the broken models they want to predict growth, but the reality is that we are now little more than a region inside the eurozone and cannot remain immune to what is happening there.

Back in 2007, when the liquidity crisis began to rock Europe's banking sector, the line from the Department of Finance and other local economists was that it would not affect Ireland – for all sorts of reasons that are now too absurd to repeat five years later.

Today, as recession batters the eurozone's core – and most of Europe – it seems we are being sold another pup.

The only good news is that the European Central Bank will probably cut interest rates from 0.75pc to 0.5pc in December as the economy burns and signs of social tension increase almost everywhere.

Another possible silver lining would be a decline in the euro against sterling, which would help so many of our companies export to the UK.

Sterling's decline to a two-week low yesterday against the euro suggests it would be foolish to wait for the pound to start depreciating soon.

Mervyn King's fondness for printing money and raging inflation in Britain mean that the euro is very unlikely to depreciate against sterling any time soon.

Male tricks in the boardroom?

The Punt suspects that EU plans to force companies to favour women over equally qualified men for board seats won't work.

The Punt is neutral on the issue, but it would certainly be an interesting experiment here in Ireland if the boards of our listed companies were forced to stock up on women.

The Punt has attended innumerable AGMs in his time, and cannot remember an event where there was ever more than one or two women at the top table.

Irish women are among the least likely to enter the workforce, so the EU quota for boards with 40pc female directors would probably mean that women were over-represented in many cases.

Whatever about the rights and wrongs of quotas, it seems like a good time for women who want to get into the boardroom to get ready for a quick promotion and some easy money.

Time to sign up for an MBA perhaps, develop an interest in golf and cultivate a few political contacts. They could also do worse than contact the Institute of Directors, an admirable organisation that is currently running courses for would-be directors (of both sexes) on corporate governance and the like.

A course like this might be no bad trick, the boardroom is finally being opened to women at a time when membership brings fewer privileges and more risks than before. Cynics might say it is a typical male trick.

Irish Independent

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