Wednesday 17 January 2018

What it says in the papers: business pages

The front page of this morning's Irish Independent business section
The front page of this morning's Irish Independent business section
The front page of this morning's Irish Independent business section
Gavin McLoughlin

Gavin McLoughlin

Here are the business stories you need to know about this morning.

Irish Independent

*The head of the State's budgetary watchdog has been forced to retract a suggestion that Budget 2016 could be in breach of European rules.

The Fiscal Advisory Council issued the clarification just hours after its chair, Professor John McHale, went on radio highlighting concerns that an EU budgetary requirement would not be met as a result of the Budget. A clarification was issued by the Council later in the afternoon.

"The Council's chairman, John McHale, regrets any confusion caused by reference to the possible requirement to improve the structural balance by greater than 1pc of GDP in 2016 in an interview on Morning Ireland on Wednesday, October 14," the statement said.

"The Council has confirmed with the European Commission that the required improvement under the rules of the SGP (Stability and Growth Pact) is 0.6pc of GDP in 2016, as stated in the Budget 2016 documentation."

*The almost universal requirement by banks for personal guarantees for SME loans is curtailing enterprise, the agency tasked with monitoring lending to small and medium enterprises has warned. 

Credit Review office chief John Trethowan said businesses need to start paying closer attention to their credit scores because legacy issues from the crises can weigh on their ability to get credit. The review office said negative credit ratings should not, in all cases, be a reason for declining credit.

*Multinationals here that have yet to phase out use of the so-called "Double Irish" will be able to benefit from even cheaper tax bills by using the Knowledge Development Box as well, a leading academic has argued.

Professor Jim Stewart, of Trinity College Dublin, who in the past has claimed US multinationals here have paid as little as 2.2pc corporation tax, also warned that although the new patent box may be OECD compliant, it will still face scrutiny from within the EU. He said it was unlikely that the new patent box would do anything to support home-grown companies, despite claims from the Government to the contrary.

"In relation to aggressive tax compliance, the EU is ahead of the OECD. So because you comply with the OECD doesn't mean that other countries will like what you're doing and will try and attack it in many ways. Because it's so complex, it's open to abuse," he said.

The Irish Times

*Ratings agency Moody's said Budget 2016 does not fundamentally change its credit assessment of Ireland, despite acknowledging a significant increase in public spending.

The spending increase was in line with expectations, Moody's senior vice-president Kathrin Muehlbronner said.

She said the target of reducing the deficit to 1.2pc of GDP was "eminently achievable".

*Troika representatives will come to Dublin next month as part of a post-bailout review of the Irish economy.

They are expected to meet officials from the Department of Finance and the Central Bank during the week-long visit which begins on November 9.

Ireland has to have two visits by the troika a year until 75pc of the bailout loans are paid back.

*A number of high-profile investors have criticised the Budget's treatment of Irish start-ups.

Ian Lucey of the Lucey fund said the Budget was a nail in the coffin of Ireland being a true player in the world technology scene, adding that the Government had favoured multinationals over domestic start-ups.

Irish Venture Capital Association chairman Brian Caulfield said many of the Budget measures were next to meaningless when it came to encouraging entrepreneurs to set up businesses.

Irish Examiner

*Donald Trump's son Eric said he couldn't be more pleased with the financial performance of the Doonbeg golf resort.

New accounts show the company behind the resort lost €2.5m last year, but Mr Trump said he was pleased with how things are going.

He said the golf course had been undergoing redevelopment work and that this work would continue next year.

*Industrial output in the Eurozone dipped in line with expectations in August. UniCredit economist Edoardo Campanella said the drop was largely due to a technical setback in Germany, but said it was too early to measure the overall effect of the Volkswagen affair.

He said business sentiment figures for September chimed with moderate growth in industrial activity in spite of sluggish trade.

ING's Bert Colijn warned that European industry appeared to be struggling, saying Eurozone industrial production was up just 0.4pc since January, but he also noted strong new-order figures.

*Lloyds Banking Group chairman Norman Blackwell said there's no compelling economic argument for Britain to stay in the EU under the current arrangements.

He said staying in the EU without significant treaty change to treaty arrangements is not ultimately sustainable, in his opinion.

The comments are a boost to anti-EU membership campaigners, who have been seeking to woo business figures.

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