Retiring central Bank governor Honolhan warns Irish Government over it’s growth
Patrick Honohan says multinational activities were boosting figures
Patrick Honohan, outgoing governor of the Irish Central Bank.
The rate of economic growth is being exaggerated and may be leading to overconfidence in planning for the future, the outgoing Central Bank governor Patrick Honohan has warned the Government.
The business activities of multinational companies were affecting the figures, he said, creating a risk that Government policy would not be based on a realistic view of future prospects.
In a letter sent to Minister for Finance Michael Noonanbefore the budget, Prof Honohan said the economy was still some way off its pre-crisis peak. This was a reason for caution in framing budgetary policy, he said.
He warned Mr Noonan it was imperative to avoid a return to the type of pro-cyclical fiscal policies observed in the past, and in particular not to base spending plans on windfall tax gains that could quickly disappear.
Separately, UCC economist Seamus Coffeyhas warned the Government against making long-term budgetary commitments on the back of temporary non-cyclical tax revenues.
Speaking at a conference in Dublin, Mr Coffey said several headline expenditure increases in the budget were predicated on a recent surge in corporation tax receipts, which remains unexplained and might well be temporary.
A cautious approach.
In his pre-budget letter to Mr Noonan, released under a Freedom of Information request, Prof Honohan repeated warnings from outside agencies such as the EU Commission and the IMF that the budget must be cautious and should aim to eliminate borrowing as quickly as possible.
The EU Commission is now examining Ireland’s budget and is expected to give a preliminary opinion by December on whether it is within fiscal rules.
Meanwhile, the Irish Fiscal Advisory Council head John McHale has expressed concern about the budgetary stance. The council will issue its formal view on the budget shortly.
Prof Honohan, in a strong warning to the Government, said the interpretation of Ireland’s economic growth numbers were “seriously complicated” by the way in which the activities of multinationals were measured, noting that a significant part of the recent growth in production could be attributed to “distorting features”.
“Neglecting these measurement issues has led some commentators to think that the economy is back to pre-crisis performance,” the governor said. Prof Honohan warned that total employment was still more than 10 per cent below the previous peak with the result that the unemployment rate has only just fallen below 10 per cent despite emigration.
Windfall gains
“All things considered, you will be alert to the danger of using windfall fiscal gains to justify long-lasting spending commitments,” he said in the letter dated August 16th.
“Distinguishing between revenue sources that can be considered as stable – such as taxes on personal income – and those which have a one-off or transitory characteristic is a challenge of which I am sure that your department is cognisant, especially given the speed at which transitory revenue sources associated with the housing bubble evaporated in 2009 and 2010,” Prof Honohan wrote.
At a seminar on the impact of austerity hosted by the Royal Irish Academy in Dublin, Mr Coffey also warned of the dangers of basing budgetary measures on temporary tax dividends.
The Government’s levy on company profits is expected to generate about €6 billion in 2015, a 50% increase on last year. A jump of this magnitude in any tax stream is “very strange”, Mr Coffey said.
Denis O’Brien accuses Lucinda Creighton of ‘self-serving’ attacks
Businessman says Renua leader ‘failed to ascertain the facts’ about Topaz contract
Billionaire businessman Denis O’Brien has accused Renua leader Lucinda Creighton of “self-serving” attacks on him following a Dáil speech in which she demanded action on the findings of the Moriarty tribunal.
In her speech, Ms Creighton said five years had passed since the tribunal found it was “beyond doubt” that former Fine Gael minister Michael Lowry had “imparted” substantive information to Mr O’Brien which was of “significant value and assistance to him” in securing Ireland’s second mobile telephone licence in the mid-1990s.
In a letter on October 23rd last, Mr O’Brien, who signed it himself and sent it from his Dublin office – “Seventh Floor, One Grand Canal Quay, Dublin 2 – said Ms Creighton had raised an Irish Mail on Sunday report that claimed he had given a Topaz refrigeration contract to Mr Lowry’s company.
“It is most regrettable that you failed to ascertain the facts before making this statement. For the record, the factual situation is the process for this contract began in 2013; the appointment letter was issued on February 6th.
“Of critical importance is that I did not take ownership of Topaz until March 24th, 2014. The only inference I can draw from your reference to Topaz is an eagerness to sacrifice the facts for the purpose of self-promotion,” Mr O’Brien complained.
Challenging Ms Creighton’s description of the Moriarty tribunal report, Mr O’Brien said: “It is abundantly clear that your motivation again here is self-serving. I find it extremely curious that when I set out the full facts in a letter to you on March 28th, 2012, you clearly had no dispute with any of them.”
In that 2012 letter Mr O’Brien wrote to Ms Creighton: “I did not make any payments to Mr Michael Lowry TD.”
The tribunal, at paragraph 61.274, page 1152, part II, volume 2, stated Mr O’Brien was “a person who made payments to Mr Lowry”.
The 2012 letter went on to argue the tribunal findings – opinions, Mr O’Brien termed them – were “completely devoid of legal effect”.
October letter.
Mr O’Brien’s October 23rd letter returned to this theme.
“My position as to the findings of the Moriarty tribunal,” he wrote, “are the same as they were on the day the report was published – they are (as stated in my letter to you) opinions with no basis in fact.”
He continued: “It is regrettable that you, as both a public representative and a lawyer, prefer to misrepresent the fact for self-advantage.”
The letter is signed, “yours sincerely, Denis O’Brien”.
Ms Creighton’s office had no comment to make.
Mr O’Brien is currently engaged in several High Courtactions, including an action against a Dublin-based public relations consultancy, Red Flag, which he has claimed in court is at the centre of an unlawful conspiracy to defame him and undermine his businesses.
In a separate action against the Dáil Committee on Procedure and Privileges, Mr O’Brien claims it failed to uphold his constitutional right to his good name by not reprimanding TDs for allegedly abusing Oireachtasprivileges.
Mr O’Brien objects to comments made about him by, among others, Social Democrats TD Catherine Murphy, who raised questions about Mr O’Brien’s banking arrangements with IBRC, the successor bank to Anglo Irish Bank.
Central Bank was not involved in Army at ATM talks,
Honohan says Honohan was spinning yars?
Taoiseach questioned on banking comments as Opposition accuse him of spinning yarns
Speaking outside Leinster House, Gerry Adams has called An Taoiseach, Enda Kenny ‘a spoof’ after he claimed he did not receive a specific briefing about increasing security at ATMs during the economic crisis`.
The Governor of the Central Bank Patrick Honohan has said all sorts of ideas were discussed when pressure came on the State’s banking system but having the Army on standby at ATM machines was “not territory the Central Bank is or was involved in”.
His comments came amidst controvsery over remarks made by Taoiseach Enda Kenny in Madrid last week. He told a European People’s Party (EPP) conference that Mr Honohan had told him to prepare to deploy the Army.
“The Governor of the Central Bank in Ireland said to me: ‘It looks like this weekend . . . you’ll have to put [the] Army around the banks and around the ATM machines and introduce capital controls like they had in Cyprus’,” he said.
Mr Kenny’s account was dismissed as a “fairy tale” by Fianna Fáil leader Micheál Martin.
Asked on Wednesday if he had received a specific briefing from the Central Bank to the effect that he might have to deploy the army, Mr Kenny said: “No, not specific, no.”
He said the Government did set up a taskforce comprised of a number of Departments and agencies of which the Department of Finance, the Taoiseach, and the Central Bank were involved.
“They considered all of these contingencies and clearly as was pointed out to you by the Minister for Finance [Michael Noonan] the question of security in the event of a break-up of the euro currency was one that was considered.”
Asked on Thursday if he regretted his Madrid remarks, Mr Kenny said: “I’ve tried to explain that when the taskforce was set up they had to consider all of the contingencies or possible options that might happen because there was a very serious situation arising right across Europe and there was a lot of talk within different Governments and so on that there might be an end to the euro currency per se.”
Asked to explain what had happened, Mr Honohan said the Taoiseach’s recent clarifications “put this story to bed, really. He talked about contingency planning exercises… sure… There was contingency planning, I absolutely agree”.
He added: “There was contingency planning and all sort of ideas were discussed. I wasn’t directly involved in most of those conversations. The Central Bank was. But we also do our own contingency planning that we don’t tell anyone about. But we also participated fully in the Government’s exercise.”
When questioned on whether he told Mr Kenny he needed to have the Army on standby Mr Honohan said he didn’t want to get into conversations he had with him. “I have no doubt that he had officials in other departments talking about contingencies of that type. That’s not territory the central bank is or was involved in. That’s clear now from what he is saying”.
Asked if this planning was related to a specific event Mr Honohan said “we are talking about 2012. There were a lot of concerns about the system, and we were talking about the system, not Ireland”.
Sinn Féin earlier this week accused Mr Kenny of standing in front of his European sister parties and spinning a yarn about the matter and now found himself in a “highly embarrsing” situation.
The HSE says it may take weeks to clear chemotherapy delays
Five patients at Our Lady of Lourdes Hospital Drogheda had their treatment postponed
The Health Service Executive has said it may take weeks to clear delays in chemotherapy treatment caused by a shortage of a specific drug to treat cancer.
A number of cancer patients have suffered delays in chemotherapy treatment due to the shortage.
Some chemotherapy drugs were recalled two weeks ago, as a precautionary measure, following fears they may have been contaminated during manufacturing.
Dublin-based pharmacy Fannin Compounding, one of two companies supplying chemotherapy drugs to Irish hospitals, issued a safety alert after a machine it uses to manufacture the medicine was found to have been contaminated.
The bacteria, which can cause potentially life-threatening gastro-intestinal infections, was found in batches of drugs during routine testing.
In a statement this morning, the HSE said some hospitals throughout the country are currently experiencing difficulties in securing continuous supply of chemotherapy drugs due to the safety alert at Fannin Compounding.
The HSE would not give any details of the number of people affected by the shortage of the drug due to the contamination, but said that it was a “sub-set of cancer patients”.
Five patients who are treated at Our Lady of Lourdes Hospital Drogheda had their treatment postponed from Tuesday to Wednesday last week.
Delays of one or two days for the cancer treatment have been experienced at Cavan Hospital, while University Hospital Limerick has also confirmed that eight patients have been rescheduled for treatment next week due to a delay in receiving supplies.
The HSE moved to assure patients that hospitals are in contact with those affected to reschedule their appointments.
The HSE’s contingency plans to deal with this issue involve sending some cancer sufferers to different hospitals for treatment and sourcing the drug from another company in Ireland as well as the United Kingdom.
It says this is a temporary solution until operations resume at Fannin Compounding.
The HSE also said the precautionary recall has been completed.
It said: “There was no evidence of contamination of chemotherapy and, more importantly, no evidence of adverse clinical consequences for patients.”
Ozone hole gets bigger, Earth to bear more UV damage
The 2015 Antarctic ozone hole area was larger and formed later than in recent years, scientists from NASA and the National Oceanic and Atmospheric Administration (NOAA) have said.
The ozone hole is a severe depletion of the ozone layer above Antarctica that was first detected in the 1980s.
The Antarctic ozone hole forms and expands during the Southern Hemisphere spring (August and September) because of the high levels of chemically active forms of chlorine and bromine in the stratosphere.
Earlier this month, on October 2, the ozone hole expanded to its peak of 28.2 million sq kms — an area larger than the continent of North America. Throughout October, the hole remained large and set many area daily records.
Unusually cold temperature and weak dynamics in the Antarctic stratosphere this year resulted in this larger ozone hole, scientists said.
In comparison, last year the ozone hole peaked at 24.1 million sq kms on September 11. Compared to the 1991-2014 period, the 2015 ozone hole average area was the fourth largest.
“During September we typically see a rapid ozone decline, ending with about 95 percent depletion in that layer by October 1. This year the depletion held on an extra two weeks resulting in nearly 100 percent depletion by October 15,” said Bryan Johnson, a researcher at NOAA laboratory in Boulder, Colorado.
The ozone layer helps shield the Earth from potentially harmful ultraviolet radiation that can cause skin cancer, cataracts and suppress immune systems, as well as damage plants.
The large size of this year’s ozone hole will likely result in increases of harmful ultraviolet rays at the Earth’s surface, particularly in Antarctica and the Southern Hemisphere in the coming months.
Thanks to the montreal protocol on substances that deplete the Ozone layer, atmospheric levels of these ozone depleting compounds are slowly declining. The ozone hole is expected to recover back to 1980 levels in approximately 2070.1
