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The Punt: Rating agency S&P cool on Eurosceptics


Greek opposition leader and head of radical leftist Syriza party, Alexis Tsipras

Greek opposition leader and head of radical leftist Syriza party, Alexis Tsipras


Greek opposition leader and head of radical leftist Syriza party, Alexis Tsipras

Rating agency S&P warned grimly yesterday that EU countries might have their credit ratings downgraded if Eurosceptic parties such as Sinn Fein or Syriza take power.

The good news for investors at least is that the ratings agency believes a Eurosceptic party is unlikely to win an overall majority any time soon, with the possible exception of Syriza, which leads Greek opinion polls ahead of tomorrow's general election.

"Clearly if a political party is advocating default, that has I think a pretty obvious implication for where the rating should be," S&P senior director Frank Gill told the Irish Independent.

The ratings agency said it thinks that commercial bank deposit outflows and weaker than expected retail sales in Greece indicate investor disquiet about Syriza's strong performance in the polls. But the ratings agency said its "baseline expectation" is that a Eurosceptic government would end up compromising on its election promises to keep access to ECB funding.

S&P does not consider rising support for Eurosceptic parties to be a temporary protest vote, or an isolated response to high-profile corruption cases. That made the Punt wonder; Where does that leave the Tories?

Shaws - now less nationwide

The Punt sees that despite the buoyant retail sales evident in the fourth quarter of 2014, the retail recovery remains very patchy in many parts of the country.

Industry body Retail Excellence Ireland said yesterday that retail sales figures for the final three months of last year rose 4.2pc - the biggest quarterly gain since 2007.

And while in the capital there's a sense that the retail sector may have bounced back, elsewhere the picture isn't as pretty.

The Punt sees that department store operator Shaws is closing its outlet in Longford town next Saturday. It opened it in October 2013 to great fanfare.

Shaws said the store hadn't performed to target.

The town was hit with another blow just a week earlier with news that Homebase - part of the UK's Home Retail Group, which also owns Argos - is planning to pull down the shutters on its store there. Staff are being consulted on the plans.

Longford is in the unfortunate position of being reasonably close by car to both Athlone and Mullingar - two superior shopping destinations.

Losing its army barracks a few years ago was also a knock.

Meanwhile, a large shopping mall - Longford Town Centre - built by developer Bernard McNamara during the boom (and beside the barracks) in 2008, has never opened.

The departure of Shaws makes its opening any time soon even less likely.

O'Leary to  self: shut up

Michael O'Leary isn't one for reminiscing too much, but this week he recalled a couple of nuggets from his early days at Ryanair. The airline turns 30 this year.

O'Leary joined Ryanair in 1988 and within a couple of years was its deputy chief executive, before becoming CEO in 1993.

When he joined, he was tasked by the late Tony Ryan with plotting a survival strategy for the then tiny airline, which was losing money in the face of a fight against what was then a State-owned Aer Lingus and others.

The Punt asked O'Leary what one piece of advice he would give his younger self if he could go back in time given all that has happened over the past three decades.

"Don't go into Tony Ryan and tell him to shut that bloody thing down. (That) it's doomed, that airlines will never make money," he said.

He also recalled how back in the early days Tony Ryan received a dividend of around £7m (€9m) from leasing firm Guinness Peat Aviation (GPA), which he'd set up and which blazed a trail for Ireland's aircraft leasing business.

"I was about 25 or 26," said O'Leary. "The seven million quid went into his bank account from GPA and went f**ing straight out into the Ryanair account where it just disappeared," he added.

"I couldn't believe it. Like, jaysus, seven million quid." Michael O'Leary is now edging on towards becoming a billionaire. Seems like almost 30 years well spent, even if he doesn't like airplanes.

Irish Independent