Economic Affairs; at home & abroad -Marie Sherlock With Budget day set to take place much earlier this year, the opening shots in the budget debate were fired off last week. Minister Richard Bruton flew a kite for tax cuts and made a return to the auction politics that helped bring the public finances into a state of collapse. · In an op-ed in the Independent, the Minister seemed to suggest that a cut to the top rate of tax would unleash an increase in employment and entrepreneurship and that there is a disincentive effect for people to work beyond €36,000. · His proposals imply a 2% cut in the higher rate of tax to bring the marginal rate down to 50%. This would have the effect of putting €64 per year back in the pocket of a person who earns €36,000, for someone earning double those earnings at €72,000, they would get back €784 and it would give €2,224 to an employee earning double that again at €144,000. This of course of little comfort to the parents who are going to be facing into schools with fewer special needs teachers in September or those facing into other such cuts imposed on public services this year. EU Finance Ministers met last week and eventually made some progress on direct bank recapitalisation by the European Stability Mechanism. The details agreed are a far remove from the lofty ambition and commitment made last June 2012 to breaking the vicious link between the sovereign and distressed banks. · In effect, this was a victory for Germany, Netherlands and Finland and the majority of their demands made last September in response to the June commitment were met. Before recapitalisation can be considered by the ESM, all options using private capital and a member state’s own financial resources must be first exhausted and only then will the recapitalisation bill be co-shared between the relevent member state and the ESM. In effect, the sovereign link will not be broken at all. · Furthermore the agreement calls for banking assets to be priced according to their “real economic value”- as opposed to long term economic value which we might recall was the brainchild of the ECB back in 2009 when it was setting down the rules for the operation of Nama here in Ireland. · For Ireland, the agreement provides little comfort. There is a mention in the very last line of the document about the potential for retrospective recapitalisations, but this has to be by mutual consent, which it is very doubtful such will ever exist on this issue. Furthermore, in stark contrast to the June announcement last year, Ireland does not get specifically mentioned. Looking ahead The Quarterly National accounts are due out this Thursday. Overall, a very marginal pick in annual growth is expected although continued stagnation in retail sales and weaker than expected goods exports in the first two months of the year could well have dragged quarterly GDP growth back into negative territory. The Economy; Ireland, Europe and the rest of the world MONDAY TUESDAY ESRI Annual Pre Budget Conference WEDNESDAY CSO · Quarterly National Accounts Q1 2013 · National Income and Expenditure 2012 · Quarterly International Investment Position and External Debt 31 March 2013 · Balance of International Payments Quarter 1 2013 FRIDAY CSO Retail Sales Index May 2013 Review of European Political Events 17-23rd June 2013- Loraine Mulligan · Trade unions in Italy led a march of about 100,000 workers and unemployed people in Rome on Saturday calling for swifter action by government to address the country’s unemployment rate, which reached 12% in April and a high of over 40% among young people under 24 years old. · Angela Merkel’s Christian Democratic party published its election manifesto in Berlin on Sunday, promising to introduce a minimum wage; to cap rent increases and to increase social spending. The platform has also been endorsed by sister party, the Bavaria-based Christian Social Union. The proposals are seen by some commentators as a move to steal ground from the centre-left Social Democratic party. · Greece’s highest court ruled that the national broadcaster, ERT, must be reopened until a replacement station is in place. One of the coalition partners, Democratic Left, pulled out of government over the controversy, leaving a slim parliamentary majority of three. · There was no agreement at the ECOFIN Council of Finance Ministers with regard to new rules for bailing out European banks. Talks are due to recommence on Wednesday, just before the European Summit closes on Thursday. There is dispute about the degree of flexibility that should be incorporated within the rules. Political events 24-28th June 2013 - Loraine Mulligan MONDAY Meeting of Agriculture and Fisheries Council, Brussels On the agenda: Negotiations on Common Agricultural Policy (CAP) reform TUESDAY Meeting of General Affairs Council, Brussels On the agenda: Preparation of the European Council on 27-28 June 2013 Oireachtas Dail: Pre European Council Statements All Stages re Abolition of Seanad Éireann Bill 2013 Fianna Fail Private Members Motion re Special Educational Needs Seanad: Committee Stage debate re Social Welfare and Pensions (Miscellaneous Provisions) Bill 2013 Oireachtas Committees Ian Talbot, CEO, Chambers Ireland will address the Committee on Jobs, Enterprise and Innovation re ‘An alternative ten point plan for Micro, Small and Medium-Sized Enterprises’ and Danny McCoy, CEO, IBEC will put forward proposals for Budget 2014 Junior Minister, Alan Kelly will address the Committee on Transport, Tourism and Sport regarding spending in this area WEDNESDAY European Council, Brussels On the agenda: approval, as part of the 2013 European Semester, of country specific recommendations for Member States with regard to structural reforms, employment policies and national budgets; discussion re implementation of ‘Compact for Growth and Jobs’; debate on industrial competitiveness and policy; debate re Commission ‘smart regulation’ agenda; presentation of possible measures to coordinate national reforms and to address the social dimension of the EMU; the idea of ‘contracts for competitiveness and growth’ with Member States; progress with regard to "banking union". Oireachtas Dail: Protection of Life During Pregnancy Bill 2013 - Second Stage Resumed (Department of Health) Private Members Business - Motion re Special Educational Needs (Fianna Fáil) Seanad: Thirty Second Amendment of the Constitution (Abolition of Seanad Éireann) Bill 2013 – Second Stage (Department of the Taoiseach) Public Service Management (Recruitment and Appointments) (Amendment) Bill 2013 – Report Stage (Department of Public Expenditure and Reform) Social Welfare and Pensions (Miscellaneous Provisions) Bill 2013 – Report Stage (Minister for Social Protection) Oireachtas Committees The Public Accounts Committee will consider the Comptroller & Auditor General’s report on Dublin Docklands Development Authority Minister Joan Burton will provide revised details of spending for 2013 to the Social Protection (Sub-Committee) THURSDAY European Council, Brussels As above Oireachtas Dail: Second stage debate on Protection of Life During Pregnancy Bill 2013 Seanad: Second Stage debate re Abolition of Seanad Éireann Bill 2013 Oireachtas Committees The Public Accounts Committee will consider spending for 2011 in relation to Environment, Community & Local Government; FRIDAY Oireachtas Dail: Second Stage debate re Protection of Life During Pregnancy Bill 2013
Posted on: Mon, 24 Jun 2013 19:01:13 +0000
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