News Archives - Page 3 of 224 - Luke O'Malley & Co

Europe seeks US blessing to maintain its trade with Iran

Three European countries and the European Union are seeking exemptions from US sanctions on Iran in a sign that the bloc’s bid to hold the landmark nuclear deal together may be in trouble.

Ireland could potentially benefit, if it means banks and businesses here can do business in Iran despite a US trade embargo.

“As allies, we expect that the US will refrain from taking action to harm Europe’s security interests,” the three countries and the EU said in a letter to the Trump administration.

They argued that the agreement with Iran remains the best way to prevent a nuclear-armed Iran and that the 2015 accord can only survive if Tehran receives economic benefits in return.

“US secondary sanctions could prevent the EU from continuing meaningful sanctions relief to Iran,” they said.

The US said on May 8 that it was pulling out of the nuclear deal, called the Joint Comprehensive Plan of Action, and would start reimposing sanctions on Iran. US officials have warned European companies to wind down their Iranian operations.

The letter was sent by France, Germany, Britain, and the EU, signatories of the landmark 2015 accord where Iran agreed to strict limits and inspections on its nuclear activities in exchange for sanctions relief. The June 4 letter was sent to Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo, and was posted on the Twitter account of French Finance Minister Bruno Le Maire.

The letter asks for public confirmation that businesses such as pharmaceuticals and healthcare are exempt from secondary sanctions, and asks the US to grant exemptions for “key sectors” such as energy, automobiles, civil aviation, and infrastructure.

It also asks for exemptions to “maintain banking channels and financing channel with Iran”.

“As close allies we expect that the extraterritorial effects of US secondary sanctions will not be enforced on EU entities and individuals, and that the US will thus respect our political decision and the good faith of economic operators within EU legal territory,” the letter said.

Even before the US pulled out of the JCPOA, many European companies faced problems financing their Iranian investments because major banks didn’t want to risk US ire by working in Iran. (Bloomberg)

Article Source: http://tinyurl.com/kbwqb42

Founder of Kerry-based tech firm embarks on US adventure with new Boston office

The founder of a Kerry-based tech firm is relocating to Boston – with his family – in a bid to expand the company’s US customer base.

John ‘Ogie’ Sheehy founded ViClarity in 2008, a period of instability where a tool to help manage new regulatory and governance policies was an innovative, and attractive, product.

With a background working in a number of US corporate multinationals, including HP, IBM and Dell, Mr Sheehy said it was a move back home from Dublin that helped him realise the opportunity,

“I was commuting up and down to Dell at the time, and I began to meet some Kerry-based entrepreneurs, even getting involved in a TY programme to help mentor students in the art of running a business,” he told the Irish Independent.

“I met a lot of very inspirational people who were globally successful.

“And by the end of 2008 I felt there was an opportunity to create a software solution focusing on compliance that could help businesses to manage compliance in a cost-effective and simple way,” he said.

Mr Sheehy took part in a nine-month Enterprise Ireland programme that helped him develop his concept and the ViClarity business.

Having already established a strong network in the south west, finding his first customer happened quite quickly.
I reached back out to people asking for validation about the business concept and met a guy who had worked in Dell.

“He was working with a nursing home group in Limerick and the big issue for them was around HIQA compliance, something I wasn’t familiar with at the time.

That particular organisation looked at the basic version of the software that I had and said, if you can manage HIQA compliance, we’ll be your first customer,” he said.

Fast forward 10 years, ViClarity’s team of nine has a strong foothold across two sectors in Ireland and the UK – in healthcare and financial services compliance.

Their scalable, flexible platform allows the client to track and manage all the necessary policies to comply with in one system, allowing the creation of transparent bespoke reports to present to auditors.

With credit unions, community banks, investment managers and the insurance sector looking for a way to decipher and ensure compliance with new regulations post-crash, Mr Sheehy said that this created a good marketing opportunity for the firm.

“We realised it was just a different set of regulations to input into the platform and we expanded in that market very quickly.

“We went from having two companies to 72 at peak time.”

A decade on, Mr Sheehy said not only has the software offering matured – responding to market and regulator feedback – but so too has clarity around market focus, and what is required to expand internationally.

Following a soft introduction to the US market, through a chance encounter with a customer at a trade show in Denver, the company’s access to that region grew in true Irish style.

“We met a guy who knew a guy in Chicago who was getting married to an Irish girl.

“It turns out he worked with a network of credit unions there, and his company had a big customer base, so he acted as our sales agent on the ground,” he said.

Their efforts yielded “moderate success” and Mr Sheehy knew a larger leap needed to be taken for US business to really take off.

Winning a place on the Bridge to MassChallenge Cork accelerator competition gave ViClarity that window.

“The winning firms were flown to Boston to understand the market and be coached in company expansion.

“When I landed, I immediately realised the opportunity of being on the ground, the concentration of potential customer base for healthcare, the second biggest in the US for fund management.

“The icing on the cake is the Irish community.

“You’d almost meet your mother.”

Mr Sheehy, his wife and two teenage children fly to Boston next week, with an aim to have a team of two set up in a Boston office by summer’s end.

His intention is to establish sales, pre-sales, customer support, account management and eventually business analysts at the Boston office.

“Here is where the mothership is though – and where the intellectual property is.

“The tech side remains here and this expansion is a great opportunity for the future growth of our Irish team,” he said.

House of Fraser to close over of half its stores

Retail chain House of Fraser is to shut over half of its stores impacting around 6,000 jobs.

The closures are part of a proposed Company Voluntary Arrangement (CVA), which will require approval from creditors who will make their decision on June 22.

Currently, the troubled group operates 59 leased stores across the UK and Ireland, however the group’s Irish stores will not be affected by the closures, with its store in Dundrum excluded from the CVA as it is a separate legal entity.

In a statement today the company said that its property portfolio is “unstainable in its current form.”

Following what has been described as a “comprehensive review” of the group’s entire property portfolio, the directors of House of Fraser have identified 31 stores for closure, which will reduce the total store estate to 28 stores.

Commenting on the closures, Frank Slevin, chairman of House of Fraser, said that the retail industry is undergoing “fundamental change” and that the group urgently needs to adapt to the fast-changing landscape in order to give it a future and allow it to thrive.

“Our legacy store estate has created an unsustainable cost base, which without restructuring, presents an existential threat to the business.”

“So whilst closing stores is a very difficult decision, especially given the length of relationship House of Fraser has with all its locations, there should be no doubt that it is absolutely necessary if we are to continue to trade and be competitive.”

It is expected that those stores scheduled for closure will remain open until early in 2019, and the company said that those impacted by the announcement have already been informed.

In preliminary results for Financial Year 2017 House of Fraser reported an operating profit of £19.8m, down from £31.8m the previous year.

Adjusted earnings before interest, taxation, depreciation and amortisation fell massively from £63.6m to £35.4m.

Article Source: http://tinyurl.com/kbwqb42

Consumers optimistic but still cautious with spending

Irish consumers are planning to spend more but they remain cautious.

The move to loosen household purse-strings comes as consumer sentiment rose in May despite uncertainty about the general economic outlook, including the evolving political crisis in Italy.

The KBC Bank Ireland/ESRI consumer sentiment index increased to 106.7 in May from 104 in April, reversing about two-thirds of a drop that had been seen between March and April.

Economists said the May reading for the survey suggests the mood of consumers is one of guarded optimism.

Jobs and wage data this year have been positive, and figures from the Central Bank last week showed Irish household savings at a record high of €101bn, indicating at least some households have the capacity to crank up spending.

However, consumers are mindful of risks to the global economy.

Despite the rise, the May index reading is lower than was seen in January or March, indicating that the recovery in household confidence is patchy.

Economist with KBC Bank Austin Hughes said there is a sense of consumers in this country being buffeted by cross currents rather than riding the crest of a wave of good economic news.

Most of the five elements of the sentiment index were up last month.

However, the two elements that were down were the expectations for the economy and prospects for household finances over the next year.

The strongest rise in the elements that make up the index was the one related to spending plans by households.

“The pull-back in expectations both for the Irish economy as a whole as well as consumers’ own household finances also sits uneasily with a ‘bubbling’ economy at present but this reading is entirely consistent with the evidence emerging from other indicators in the past couple of weeks,” Mr Hughes said.

He said the measured tone of Irish consumer confidence mirrors the picture of the economy suggested by relatively modest growth in retail sales.

The economist said this is at odds with the recent warnings from the Paris-based think-tank, the Organisation for Economic Co-operation and Development, that the economy is experiencing rising “wage pressures”.

Mr Hughes said the tone of the latest consumer confidence reading is entirely consistent with recent indicators showing modest increases in earning and spending that point towards an uneven recovery across households and businesses.

Economic momentum worldwide has been cooling in recent months.

Article Source: http://tinyurl.com/kbwqb42

Losing just one big multinational would leave Ireland nursing a €276m tax shortfall

The loss to Ireland of just one of the bigger multinationals would leave the State nursing a €276m tax shortfall, according to the Government’s budget watchdog.

The Irish Fiscal Advisory Council’s (IFAC) Fiscal Assessment Report for June 2018, published today, includes an illustration of the vulnerability of the tax system.

In a modelled example, researchers found that the loss of one of the top 10 tax-paying corporations would mean €276m a year less being paid in corporation tax – almost 4pc of the €7.3bn total.

The impact on payroll taxes and earnings, even of a loss of 2,000 jobs, would be far less serious to the wider economy, they noted.

The IFAC was established in 2012 as an independent watchdog to monitor budgets. In its latest assessment, chairman Seamus Coffey warned that a key improvement in the public finances – the primary balance that tracks the difference between spending versus revenue raising when interest is excluded – has stalled since 2015.

Since then, additional State revenues – including extra tax and other income – has been absorbed by greater spending, he said.

The scale of that trend was evident by tracking-stability programme updates (SPU), the Department of Finance’s key budget setting document.

“In each iteration of the SPU the level of spending has been revised up,” Mr Coffey said.

The result was that planned primary balances had shown little change, even as tax and other revenues increased.

In 2015 the balance that was expected by 2018 would have been €8bn, but spending increases in the interim mean it will be just €4bn.

Mr Coffey, an economist at University College Cork, said the economy was not overheating, but that “talk of over-heating pressure is not misplaced”.

“The Government should at least stick to its [tax and spending] plans for 2019 and anything more expansionary is not likely to be appropriate,” the Fiscal Council report said.

The bulk of the €3.5bn of so-called fiscal space – the capacity to reduce taxes or hike spending – is already accounted for by existing commitments, Mr Coffey said.

Unexpected increases in tax revenue or lower interest rates on the national debt should not be used to fund spending increases, he said.

A sharp revival of house building – something IFAC would welcome and has been expecting – could prompt overheating if counter measures weren’t adopted, he said.

Any tax bonanza from a housing revival should be treated as a one-off – and used to reduce the national debt or directed into the planned rainy day-fund, he said.

IFAC was supportive of the idea of a rainy-day fund, which Finance Minister Paschal Donohoe plans to introduce at the Budget.

However, Mr Coffey said the idea needed to be better developed, including tweaking EU budget rules so it can be used to fund stimulus when the economy is in trouble.

Department of Finance figures yesterday showed the State collected a record €20.5bn in taxes in the first half of the year, but higher spending meant an Exchequer deficit of €24m for the period compared to a surplus of €383m at the same time last year.

Overall, total net voted expenditure to the end of May was €19.336bn, below profile but up €1.5bn compared to the same period last year. Non-voted expenditure was €4.554bn, up year-on-year by 7.6pc or €320m, including higher EU contributions.

Article Source: http://tinyurl.com/kbwqb42

Doherty urged to cut child benefit for high earners to fund more childcare

Social Protection Minister Regina Doherty has indicated she’s prepared to examine cutting child benefit for higher earners to pay for childcare for all.

The minister will get her officials to look at households earning more than €100,000 that are also getting child benefit.

Ms Doherty was responding to proposals she shift part of the €2bn children’s allowance away from higher earners, by means-testing, to help fund childcare services.

The move will revive memories of a 2012 push by the Troika to means-test children’s allowance that was eventually parked as the bailout ended.

Ms Doherty was speaking on a panel last Friday on social affairs.

Employers group Ibec and trade union Siptu both spoke in favour of changing the child benefit system.
Tony Donohoe, the head of education and social policy at Ibec, called on the minister to means-test children’s allowance and transfer the saving to childcare services.

“Childcare is talked about a lot, but is very expensive and has to be paid for – €330m [of children’s allowance] goes to households where the income is over €100,000 a year,” he said.
In response, Ms Doherty said she intended to examine the payments to higher earners, and indicated she was prepared to look at the options for shifting part of the universal child benefit to fund childcare instead.

“I have just made a note – to look at the counties where households earn over €100,000 and are paid the children’s allowance,” she said.

“We need to invest heavily in childcare, and [if] we can’t have a good quality childcare and a universal payment system [child benefit], we need to weigh that,” the minister said.

In the past, politicians had gone “halfway down that road”, she noted.

They were speaking at an event organised by the Institute of International and European Affairs (IIEA) and the European Commission Representation in Ireland. The event was hosted by Dan O’Brien, Irish Independent columnist and chief economist at the IIEA.

Cash

Trade unions have traditionally opposed any shift from a universal system of child benefit. However, Siptu chief economist Marie Sherlock, also on the panel, said the system needed to be looked at.

Raising child benefit had been used in the past instead of reforming the system, she said.

That was a “lazy way out” to increase the cash in people’s pockets, she said.

There was scope within the system to shift some funds away from the direct transfers, she said, but added that the Advisory Group on Tax and Social Affairs – which produced the Mangan Report – recommended that a minimum universal benefit be maintained when it reported to then-minister Joan Burton in 2012.

The Government is under pressure to fund better childcare provision on a number of fronts.

Ireland’s poor delivery of affordable childcare was singled out by both the IMF and the European Commission in their latest reports on the economy here – with both noting that lack of provision means fewer women in the workforce with implications for gender equality and skills shortages.

On the same panel, Joost Korte, the most senior European Commission official responsible for Social Affairs, warned access to affordable, full-time quality childcare in Ireland was unacceptably poor.

Ireland was the most expensive country in the EU for lone parents and second highest for couples when it comes to childcare, Mr Korte said.

“Of course, that has a negative impact on women’s employment.”

Ireland’s model of supporting those with children through a direct cash payment was “very unusual” in Europe, he said.

Across the EU, countries offer cash supports, direct provision of childcare, voucher systems and mixes of all three, he said.

While he didn’t identify a preference, he said Ireland’s model was not working.

“The current system is not the right one,” he said.

Article Source: http://tinyurl.com/kbwqb42

Consumers optimistic but still cautious with spending

Irish consumers are planning to spend more but they remain cautious.

The move to loosen household purse-strings comes as consumer sentiment rose in May despite uncertainty about the general economic outlook, including the evolving political crisis in Italy.

The KBC Bank Ireland/ESRI consumer sentiment index increased to 106.7 in May from 104 in April, reversing about two-thirds of a drop that had been seen between March and April.

Economists said the May reading for the survey suggests the mood of consumers is one of guarded optimism.

Jobs and wage data this year have been positive, and figures from the Central Bank last week showed Irish household savings at a record high of €101bn, indicating at least some households have the capacity to crank up spending.

However, consumers are mindful of risks to the global economy.

Despite the rise, the May index reading is lower than was seen in January or March, indicating that the recovery in household confidence is patchy.

Economist with KBC Bank Austin Hughes said there is a sense of consumers in this country being buffeted by cross currents rather than riding the crest of a wave of good economic news.

Most of the five elements of the sentiment index were up last month.

However, the two elements that were down were the expectations for the economy and prospects for household finances over the next year.

The strongest rise in the elements that make up the index was the one related to spending plans by households.

“The pull-back in expectations both for the Irish economy as a whole as well as consumers’ own household finances also sits uneasily with a ‘bubbling’ economy at present but this reading is entirely consistent with the evidence emerging from other indicators in the past couple of weeks,” Mr Hughes said.

He said the measured tone of Irish consumer confidence mirrors the picture of the economy suggested by relatively modest growth in retail sales.

The economist said this is at odds with the recent warnings from the Paris-based think-tank, the Organisation for Economic Co-operation and Development, that the economy is experiencing rising “wage pressures”.

Mr Hughes said the tone of the latest consumer confidence reading is entirely consistent with recent indicators showing modest increases in earning and spending that point towards an uneven recovery across households and businesses.

Economic momentum worldwide has been cooling in recent months.

Article Source: http://tinyurl.com/kbwqb42

EU will hit Republican voters to fight trade war

The European Union will target consumer, agricultural and steel products made in many key Republican constituencies when it imposes tariffs against US imports in retaliation for punitive duties US President Donald Trump announced yesterday.

The Trump administration’s tariffs on imports from key allies sent US and European stocks into a tailspin and stoked demand for the safety of government bonds.

The US president’s escalation of trade tensions with Canada, Mexico and the European Union hammered American industrial and financial shares.

The Trump administration’s unilateral action upended the global trade order and was met with retaliatory actions that could imperil economic growth.

The ratcheting up of tension overshadowed reports that Italy is close to forming a government that is more EU-friendly than investors had feared.

The Trump administration hit the EU, Canada and Mexico with 25pc duties on imported steel and 10pc on aluminium in Washington’s most aggressive trade action yet against allies.

Washington claimed it was acting to protect national security, an assertion members of the EU have dismissed. Ireland risks being on the front line if the trade war heats up.

A presentation circulated by the National Treasury Management Agency (NTMA) yesterday shows the US is our biggest single trading partner – followed by the United Kingdom.

Last night Brussels said it will impose retaliatory tariffs on €2.8bn of selected American imports as soon as June 20. Harley-Davidson motorbikes and bourbon whiskey, both produced in districts supportive of the ruling US Republican Party are expected to be among the goods slapped with import duties.

Europe will also take its case to the World Trade Organisation (WTO).

“The US now leaves us with no choice but to proceed with a WTO dispute settlement case and with the imposition of additional duties,” European Commission President Jean-Claude Juncker said. “We will defend the Union’s interests, in full compliance with international trade law.”

The Republican speaker of the House of Representatives, Paul Ryan, is from Wisconsin, home of Harley-Davidson, and Senate Majority Leader Mitch McConnell is from Kentucky, where bourbon whiskey is made.

Harley-Davidson said it will suffer as a result of tariffs.

“We support free and fair trade and hope for a quick resolution to this issue,” the bike-maker said in an emailed statement. “A punitive, retaliatory tariff on Harley-Davidson motorcycles in other major markets would have a significant impact on our sales, our dealers, our suppliers and our customers in those markets.”

The dispute is likely to dominate a meeting of finance ministers from the Group of Seven nations in Canada. The US has just slapped tariffs on five of it six counterparts, including the host.

“We are deeply disappointed that the US has decided to apply tariffs to steel and aluminium imports from the EU on national security grounds,” the UK government said in a statement.

Germany “rejects the tariffs imposed by the US on steel and aluminium,” Chancellor Angela Merkel’s chief spokesman said in emailed statement.

“We consider that this unilateral measure is unlawful, and that the national security concerns given as the reasons can’t be upheld,” the spokesman added. “The measures instead carry the risk of creating a spiralling escalation that will harm everyone.”

French officials said the EU isn’t seeking a trade war but has no choice but to impose “re-balancing” tariffs on selected US exports. The finance officials said it was hard to envision talks happening with the tariffs in place. (Additional reporting Bloomberg)

Article Source: http://tinyurl.com/kbwqb42

London-based angel investor group to invest €3m in Irish start-ups over next three years

A new London-based angel investment syndicate is to invest €3m in Irish start-ups over the next three years.

HBAN’s London syndicate supports the creation of an international network with an affinity to Ireland.

Up to six ambitious Irish companies with eyes for international expansion will see investment from the syndicate over the next 12 months.

These early-stage companies can expect access to contacts and a degree of mentorship, in addition to financial support, to help them grow.

Led by entrepreneur Harry McDermott, the UK-based syndicate has already recruited more than 10 experienced investors from background including finance, technology, telecoms, medtech and fintech

“There is a real appetite among the London-based Irish community to invest in high potential Irish start-ups, particularly in the technology and medtech sectors,” said McDermott.

“The key factors for our members to invest are the global potential of the company, having a lead investor in the deal and the Seed Enterprise Investment Scheme (SEIS).”

McDermott said that a crucial advantage for the investors joining the London syndicate is that it is HBAN-managed.

“This means that the companies that pitch to our members have been sourced, vetted, prepared and confirmed as investor-ready, high-potential start-ups by HBAN.”

HBAN’s National Director John Phelan,said that the international syndicates are a testament to the quality of Irish start-ups with global ambitions.
“The launch of a second overseas syndicate is a significant step towards HBAN establishing a global business angel network that has an affinity to Ireland, and we wish to further develop connections with the international investment community,” he said.

“New York and London are key locations and advanced discussions are already in place to launch new syndicate partnerships in other locations.”

Article Source: http://tinyurl.com/kbwqb42

OECD raises possibility of ‘another property bubble’ as it warns of overheating in Irish economy

SIGNS of overheating have started to be seen in the Irish economy, the Organisation for Economic Cooperation and Development has warned – and Brexit remains the biggest risk.

In its latest biannual economic outlook, the Paris-based agency pointed out that new mortgage lending and loans to small businesses have risen sharply in recent months, as the property market remains buoyant despite high bank lending rates.

It advised that lending restrictions may need to be extended to cool credit growth.

It also raised the possibility of “another property bubble” if house price growth rates – currently at 13pc per year – continue.

The OECD raised concerns about Ireland’s property market in 2006, a short time before the financial crash. At that point, its warnings were largely ignored by the Government.

“Property prices may increase more strongly, which would boost further construction activity in the near term but may induce another property bubble associated with a strong surge in credit growth,” the OECD says in its latest report.

“Persistently high private indebtedness also poses a downside risk, as it leaves the economy sensitive to rising interest rates,” it added.

The biggest immediate risk to Ireland’s economic outlook remains Brexit, however.

“Economic activity in Ireland is projected to remain robust, but to ease gradually,” it added.

“Abstracting from volatile activities of multinational enterprises (MNEs), domestic demand will remain robust with solid employment growth and consumption.

“As the labour market tightens, wage pressures will be strong, feeding into higher inflation. Business investment will slow after its strong rebound, while the construction sector will retain its momentum.”

Article Source: http://tinyurl.com/kbwqb42