Donie's Ireland daily news BLOG

The Euro hits a two year low after Draghi comments today causes a dip in the markets

  

The euro slumped to a two-year low and European government bond yields dipped on Thursday after European Central Bank chief Mario Draghi reiterated plans to revive the struggling euro zone economy by increasing the ECB’s balance sheet.

Stocks on world markets were mixed, with Wall Street little changed a day ahead of the U.S. government’s employment report for October. The S&P 500 managed to touch another record high.

Markets had been unsettled leading up to the European Central Bank’s monthly policy meeting after Reuters reported that some central bank governors who set ECB policy were unhappy about Draghi’s secretive approach and erratic communication.

But in a statement that strengthened the ECB’s commitment to re-inflate its balance sheet toward 3 trillion euros, its crisis-era level, Draghi said disagreements were just part of central bank policymaking.

His statement and the promise of another trillion euros of easing sent the euro tumbling to $1.2396, its lowest level since August 2012, and pushed the FTSEurofirst 300 .FTEU3 index of top European shares up 1 percent, though the surge was short-lived. The index closed up 0.19 percent.

The euro pared declines as investors looked for more concrete measures from the central bank and was last off 0.6 percent, at $1.2405.

“It still seems as though the ECB is hemmed in by fiscal policymakers who are reluctant to expand the monetary base potentially and reform,” said Jack Ablin, chief investment officer at BMO Private Bank in Chicago. “Draghi has sort of reached the end of his authority and his open-mouth policy isn’t working.”

Yields on government bonds issued by Portugal and France fell on the expectation that additional policy actions will keep rates low. The yield on Germany’s 10-year note was flat at 0.828 percent after hitting a high of 0.858 percent.

U.S. stocks edged higher as some disappointing earnings held equities in check, despite another round of upbeat data on the labor market.

The Dow Jones industrial average .DJI rose 34.01 points, or 0.19 percent, to 17,518.54, theS&P 500 .SPX gained 1.59 points, or 0.08 percent, to 2,025.16, and the Nasdaq Composite.IXIC dropped 1.99 points, or 0.04 percent, to 4,618.73.

The MSCI all-country world equity index .MIWD00000PUS was off 0.18 percent.

The combination of Draghi’s message and a bigger-than- expected fall in the number of Americans applying for first-time unemployment benefits helped push the dollar .DXY to its highest level since June 2010 against a basket of major currencies.

The Bank of England also met on Thursday and left its record low rates in place. There are signs the BoE is edging toward a first post-crisis rate hike, but a recent slowing of economic momentum has cooled expectations it will move soon.

The dollar’s strength continued to weigh on oil prices, Brent oil, which has plunged nearly 30 percent from its high in June, remained near a four-year low at $82.82 a barrel LCOc1. U.S. crude CLc1 was down 0.8 percent at $78.03.

The fallout of the Irish bailout & the ECB letters four years later

  

The ECB is today examining the release for publication of four letters between Jean Claude Trichet and Brian Lenihan.  The letters are from the period October – November 2010, a particularly fraught time for the Euro area in general, and the Irish government in particular.

One of these letters contained an overt threat from the ECB governing council that it would stop funding the Irish banking system if the government refused to go into an EU-ECB-IMF organised bailout.

The other letters are dated 15 October 2010, from Trichet to Lenihan.  A reply from Lenihan on 4 November 2010, the 19 November Trichet letter and a response from Lenihan on 21 November, confirming the government’s decision to accept the bailout deal.

That last letter begins “Dear Jean Claude, First let me say that I fully understand your concerns and that of the governing council….”

We know this because it has already been released under Freedom of Information and published by Journalist Gavin Sheridan, who has waged a long running FOI campaign to get these letters into the public domain – a campaign that included an (unsuccessful) appeal to the European Ombudsman, Emily O’Reilly.

In turning down his request for the documents in November 2012, the ECB did give some indication of the contents of the letters:

The letter from Trichet on October 15th “expressed the ECB’s appreciation for the Irish government’s commitment to developing a multi-annual economic and fiscal adjustment strategy (this was the “four year plan” from the department of finance, which later became the “troika Programme”).

It also recalled the rules to which Eurosystem credit operations are subject, as well as the role of the ECB’s governing council in monitoring provisions of emergency liquidity assistance, in particular in the case of large liquidity provisions given to some entities, as this may interfere with the objectives and tasks of the Eurosystem and the prohibition of monetary financing under the Treaty on the Functioning of the European Union”.

This letter was issued about three weeks after Brian Lenihan had met ECB executive board member Juergen Start and EU Commissioner Olli Rehn for secret talks in Brussels about the rapidly increasing costs of Ireland’s bank collapse.

With the initial two year guarantee ending in September 2010, the banks faced a “funding cliff” as they tried to refinance billions of euro worth of bonds that were expiring.

Brian Lenihan’s letter to Trichet on November 4 2010 expressed – according to the ECB’s précis of the letter – “the Irish government’s concerns about the very adverse financial market developments at that time, in relation to the widening of the spread of Irish government bonds vis avis German Bunds and its possible impact”.

This letter was written after the so called “Deauville declaration” by Chancellor Merkel and President Sarkozy, which stated that France and Germany would back the EFSF and EFSM rescue funds, but they would expect bank bondholders to lose some of their money as part of the restructuring of Euro area banks.

Markets reacted very badly to this, and it triggered a huge blowout in Irish bond yields, as investors dumped Irish government paper. These are the “adverse financial market developments” referred to by the ECB.

At this time Brian Lenihan announced the four year plan would entail  a new €15 billion adjustment programme, with €6 billion of that front loaded into the 2011 budget.  This was to be on top of the €15 billion adjustment that had already happened over the previous two years.

The third letter referred to by the ECB in its FOI refusal to Gavin Sheridan is that of the 19th of November from Trichet to Lenihan.  This was written the day after Governor Patrick Honohan’s famous interview on Morning Ireland, when he told the nation the ECB expected Ireland t take a bailout programme, and that the IMF was already in Dublin for meetings that morning.

The ECB says “the letter of 19 November 2010 expressed the concerns of the ECB’s governing council regarding the extraordinarily grave and difficult situation faced by the Irish Financial sector at the time, and its impact on the stability of the Irish financial sector as a whole. The letter also invited the Irish government to take swift and bold action in order to address those concerns.

“In line with the message which it has consistently delivered to the public, the ECB encouraged the Irish government to commit to taking decisive action in the areas of fiscal consolidation, structural reform and financial sector restructuring, including recapitalisation where necessary.  Similarly th ECB also asked for reassurance that th Irish government would take the necessary action to ensure that the balance sheet of the Central Bank of Ireland remained protected, in line with the principle that liquidity could only be provided against adequate collateral”.

This last line is particularly significant, as it appears the ECB had severe doubts about the bank assets that had been pledged in return for borrowings from the ECB that amounted to some €140 billion at that point as well as emergency liquidity assistance (ELA) of some €30 billion for Anglo Irish Bank and Irish Nationwide.  The ECB was only supposed to lend (including ELA) to solvent banks – i.e. ones they could get their money back from.

Lenihan wrote to Trichet on 21 November, the day the government decided to formally seek a bailout programme from the Troika.  Lenihan’s reply states “In relation to points (1) to (4) of your letter, I would like to inform you that the Irish Government has decided today to seek access to external support from the European and International support mechanisms.  This grave and serious decision has been taken in the light of the developments I have outlined above (the Deauville declaration, the Greek debt Crisis, ratings agency downgrades, an economic slowdown), and informed by your recent communications, and the advice you have conveyed to me personally and courteously in recent days”.

The ECB was not the only one to to be worried about the country. Olli Rehn recently confirmed on the Marian Finucane show that Timothy Geithner, the then US treasury secretary and former head of the New York Fed had raised his worries that Anglo could trigger an international banking crisis at the G20 summit in Seoul on November 11 2010.

Rehn said he met Geithner, Trichet and German finance minister Wolfgang Schauble in Seoul, and they had agreed that Ireland had to enter a bailout programme to stop the threat of a wider banking crisis.

The following day – November 12 – Trichet reportedly phoned Lenihan and apparently told him then that the ECB could not go on funding Irish banks if the state did not enter a bailout programme.

Over the next few days the Taoiseach and Irish ministers say Ireland is not looking for a bailout, until on Thursday November 18th, Patrick Honohan phones into Morning Ireland from the Eurotower in Frankfurt, and says the ECB expects the government to do a deal with the Troika for “tens of billions”.

Irish marriages now older when tying the knot than ever before

 

CSO data shows 18% of Irish people aged 16-24 have never accessed the internet.

Irish brides and grooms have aged by nearly five years each over the last two decades, according to the Central Statistics Office (CSO).

Irish brides and grooms have aged by nearly five years each over the last two decades while the popularity of civil marriages in the Republic has jumped from under a thousand in 1994 to more than 6,000 last year, according to the Central Statistics Office (CSO).

As always its statistical yearbook published today offers a snapshot of where we are as a society and this year’s book paints a picture of marrying couples inclined to wait longer before tying the knot and much less inclined than at any point in modern history to take their vows in a Catholic Church.

The average age of a groom last year was just shy of 35 while brides waited until just before their 33rd birthday before saying “I do”. In 1994 men, typically married in the last weeks of their 20s while the average age of women marrying that year was 27 and three quarters.

Apart from aging marrying types, the other big shift in the nuptial stakes has seen people eschew religion in favour of the civil option. All told, 29.5% of the 20,680 marriages registered last year were civil ceremonies compared with just 5% some 20 years earlier.

While the number of Church of Ireland weddings has remained consistent with 434 people having their weddings registered under the auspices of that faith in 1994 compared with 453 last year, the number of Roman Catholic weddings has fallen from 15,200 20 years ago to 12,921 last year.

  There were 68,930 births registered in 2013, down 3,295 on the 72,225 births registered the previous year with 37% of births recorded among mothers aged between 30-34.

Yet again, most Irish parents displayed a shocking lack of originality when it came to naming their offspring with Jack and Emily once more proving to be the most popular babies’ names in 2013 – the third year in a row the two names have topped the popularity charts. The popularity of Jack is even more enduring and has occupied the number one slot since 2007.

The statistics also record household weekly disposable income for 2012 and puts the figure at €776.26, a decline of 3.1 per cent on the 2011 value. Household disposable income peaked in 2008 at €939.89 and fell by 17.4% between then and 2012.

There were 71,348 new private cars licensed in the year to the end of December 2013, a fall of 6.4% compared to the same period in 2012.

Irish residents made almost 6.6 million trips out of the country in 2013, 85% of which were to other EU countries. Most domestic trips were made either for holidays or to visit friends and relatives as opposed to business with the average family visit lasting 2.5 nights.

The total area farmed in 2013 was 4.5 million hectares. Crops, fruit and horticulture accounted for just 8% of land usage with silage making up 24%, hay 5% and 52% going to pasture for 52% with 11% being used for rough grazing.

By contrast, in 1853 there were 639,000 hectares and 279,000 hectares under oats and potatoes respectively. Since then there has been a decline of over 95% in both those areas with the 2013 figures standing at 27,000 hectares for oats and 11,000 hectares for potatoes.

While farming has featured in surveys for close to 200 years, Facebook and Twitter are new to the statistical party.

In 2013, 46% of businesses said they used social networks to connect with customers compared with an average of 28% across the EU. While it is easy to assume everyone is plugged into the social networks, some 18% of Irish people aged between 16 and 24 have never accessed the internet.

7,000 patients on Irish hospital trolleys last month

  

Almost 7,000 patients who needed to be admitted to hospital last month found themselves on trolleys either in overcrowded Emergency Departments (EDs) or wards, the Irish Nurses and Midwives Organisation has said (INMO).

According to the INMO’s latest ‘Trolley/Ward Watch’ figures, 6,977 patients were treated on trolleys in Irish hospitals during October of this year, compared to 5,209 patients in October of last year – a rise of 34%.

The hospitals with the highest number of patients on trolleys in October 2014 included Beaumont Hospital in Dublin (658), Our Lady of Lourdes in Drogheda (631), Connolly Hospital in Dublin (570), University Hospital Galway (505) and University Hospital Limerick (484).

Meanwhile the hospitals with the biggest increase in the number of patients on trolleys between October 2013 and October 2014 included the following and as per the caption above.

Midland Regional Hospital Tullamore, which had 20 patients on trolleys in October 2013 and 413 in October 2014
Portiuncula Hospital in Galway, which had 18 patients on trolleys in 2013 and 127 in 2014
Wexford General Hospital, which had 73 patients on trolleys in 2013 and 222 in 2014.

According to INMO general secretary, Liam Doran, this marks the fourth month in a row during which trolley figures have increased when compared to the same period last year.

The trolley figures for September 2014 were 32% higher than September 2013, the August 2014 figures were 19% higher than the August 2013 figures and the July 2014 figures were 8% higher than the July 2013 figures.

“There is no doubt that this worsening situation arises as a direct result of the wholly inadequate budget given to the health service in 2014 to provide services to ill and vulnerable people. As this economy recovers and the Government speaks of growth and economic green shoots, there is no excuse to have growing numbers of ill people on trolleys with no privacy and dignity,” he insisted.

He pointed out that the health service is now entering the peak winter period and he warned that some hospitals will simply be unable to cope with the inevitable increase in demand that is expected in the coming weeks.

“The INMO is now calling upon the Government and the HSE to immediately bring forward the €25 million, which is allocated to address delayed discharges in the 2015 budget, so that it is available immediately to provide additional beds, home care packages and frontline staff,” Mr Doran added.

Image of birth of planet captured by a Chilean telescope

 

ASTRONOMERS SAY IMAGES COULD TRANSFORM THEORIES ABOUT HOW PLANETS ARE FORMED. 

This image compares the size of the Solar System with HL Tauri and its surrounding proto-planetary disc. Although the star is much smaller than the Sun, the disc around HL Tauri stretches out to almost three times as far from the star as Neptune is from the Sun.

Some of the most detailed images ever taken of new planets being born around a star were published today, which astronomers said could transform theories about planet formation.

High in the Chilean desert, the Atacama Large Millimeter/submillmeter Array, or Alma, observed the planet-forming disc around the young HL Tauri star, producing the sharpest pictures ever made at submillimeter wavelengths.

The pictures show clear concentric rings in the dust left over from the formation of the star, the gaps indicating that planets are already forming, sweeping a path through the material.

HL Tauri, about 450 million light-years away, is around one million years old, a baby by astronomical standards. At that age, current theories suggest there should be very little in the way of planet formation around the star, Alma deputy director Stuartt Corder said.

“But what we find is in this very young phase, we see all these gaps in the ring, in the disc, and these gaps are cleared by large planetary cores,” he said.

“So even at this young age, Alma has discovered that already large planetary cores are forming, so the process of planet formation has to occur much faster and much earlier than we had ever expected.”

Stars are formed in nurseries of dust and gas clouds, collapsing under the effect of gravity until they eventually ignite. The remains of the gas and dust that surround the star clump over time into planets, comets and asteroids.

The discovery is Alma’s first observation in a new and more powerful mode that is its near-final configuration. In June, its final antenna was put in place.

The telescope is situated in the remote Atacama desert in northern Chile, where dryness and altitude produce some of the best conditions possible on Earth for observing the night sky.

Alma’s operations are led by the European Southern Observatory, the US National Radio Astronomy Observatory and the National Astronomical Observatory of Japan.

Ireland well off track on climate change targets

  

TRÓCAIRE CALLS ON THE GOVERNMENT TO INTRODUCE TARGETS TO REDUCE IRELAND’S CARBON FOOTPRINT

Ireland’s carbon emissions are equal to that of 400 million of the world’s poor – Trócaire

Ireland is “significantly off track” in meeting its targets for reducing greenhouse gas emissions, according to a new report on climate change from Trócaire.

The aid agency also said Ireland’s carbon emissions are equal to that of 400 million of the world’s poor, and called on the Government to introduce targets to reduce Ireland’s carbon footprint.

“Under the European Union climate and energy package for 2020, the Republic of Ireland has a 20% reduction target in greenhouse gas emissions by 2020,” the report said.

“However, the latest figures from the Environmental Protection Agency indicate the emissions in the Republic of Ireland . . . is significantly off track, with decreases of only 5-12% projected.”