News Archives - Page 4 of 289 - Pat Carroll PCCO - Chartered Accountants & Tax Advisors

EIB pledges €40bn to tackle virus fallout

The European Investment Banks (EIB) is to make up to €40bn available to counteract the economic crisis caused by the Covid-19 outbreak.

The organisation has also called on its members to set up a further guarantee for small and medium sized firms.

The bank said the money could be made available at short notice.

It will be supported by guarantees from the EIB Group and EU.

“We need a strong European response and we need it now. Europe needs another ‘whatever it takes’ moment,” said EIB President Werner Hoyer.

“The EU bank will help in this crisis as it did in every past moment of hardship in Europe, be it due to economic downturns or natural catastrophes.”

“We will immediately focus on assisting small and medium companies and mid-caps. They badly need help, and they need it quickly.”

Additional funding will be made available for the healthcare sector to assist it with emergency infrastructure and the development of cures and vaccines.

The EIB also said Ireland would benefit from the measures.

“The EIB Group recognises the impact that the Corona virus is already having on the Irish economy, employment and daily life,” said Andrew McDowell, European Investment Bank Vice President  

“Detailed discussions with Irish government, the SBCI and other stakeholders are taking place to ensure that this package of new measures to strengthen resilience to the virus shutdown can rapidly support sectors in Ireland most vulnerable to this unprecedented shock.”

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Retail group expects 200,000 more job losses over Covid-19 pandemic

Retail Excellence has forecast that another 200,000 people will be out of work by the end of this week because of the measures put in place to tackle the coronavirus.

This is in addition to the estimated 140,000 people who have already lost their jobs since the measures were announced last Thursday.

Retail Excellence Chief Executive David Fitzsimons called for a decree suspending all non-essential commerce, the introduction of a business boost grant, and the suspension of VAT and rate payments for a year. 

Speaking on RTÉ’s Morning Ireland, Mr Fitzsimons also spoke about the personal toll the pandemic has had on him and his family.

Earlier, the Minister for Finance insisted that any response from his department must be proportionate and consistent with public health policy.

Speaking on RTÉ’s Morning Ireland, Paschal Donohoe acknowledged “the strain that the retail and many parts of our economy are under”.

However, he refused to be drawn on whether Government would cease VAT payments for businesses, or whether they would introduce a “decree” to force non-essential businesses to close down. 

Meanwhile, Croke Park is set to become a drive-through facility for testing for Covid-19 from today. It will not be a walk-up service and is designated for appointments only.

It is envisaged that cars carrying people with appointments will arrive at Croke Park via Sackville Avenue. 

People will be processed in the outer Cusack car park before driving through the service tunnel, where tests will be carried out.

Cars will then exit the stadium via St Joseph’s Avenue and at no stage will visitors leave their cars. 

Meanwhile, a full-time Public Order Unit is being set up by gardaí in response to the coronavirus outbreak.

The unit will be tasked with patrolling key public order risk locations, the protection of life and property, the maintenance of law and order, emergency response and dealing with any protests or public order issues.

A total of 100 gardaí, sergeants and inspectors will be assigned to two rotating units on 12-hour shifts.

These are being recruited from stations all over Dublin and Assistant Commissioner Pat Leahy plans to have them operational by tomorrow afternoon.

This is the first time gardaí will have the same members attached full-time to a Public Order Unit, which is being rapidly established as part of the policing response to the coronavirus.

Garda headquarters said the move was not a significant escalation in policing but prudent in the current climate of potential public unease and disquiet as the COVID-19 situation develops.

A spokesperson also said it was logistically preferable that the same gardaí be attached to the public order unit instead of different officers being called in daily.

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European exchanges pledge to stay open in face of coronavirus stampede

European exchanges have vowed to stay open for business despite extreme volatility triggered by the coronavirus epidemic and four countries banning short-selling to shield some of Europe’s biggest companies.

The Federation of European Securities Exchanges (FESE) said European exchanges will and should continue to remain open at all times. 

“Closing the markets would not change the underlying cause of the market volatility, it would remove transparency of investor sentiment and reduce investors access to their money,” FESE said in a statement. 

Huge falls in share prices on both sides of the Atlantic have sparked talk that governments could close markets for a period to calm investor nerves. 

US Treasury Secretary Steve Mnuchin said the Trump administration intends to keep markets open through the coronavirus crisis, although shorter trading hours may be needed at some point. 

FESE’s director general Rainer Riess said that during a time of heightened volatility and anxiety, it would not be wise to change operations in such a way. 

“This is a topic that requires careful consideration and given various consultations ongoing it would be premature to speculate about any changes,” he said. 

European exchanges were already considering a permanently shorter session before the coronavirus hit markets given their trading day is far longer than on Wall Street. 

FESE said the closure of markets during the current crisis could hit contracts and generate an “unpredictable number of defaults”. 

While exchanges vowed to stay open, France, Italy, Belgium and Spain introduced temporary measures to halt bets on falling shares at scores of companies from the world’s largest brewer Anheuser-Busch InBev, to Spanish bank Santander and Air France-KLM. 

The curbs, and calls by some Italian politicians for stock markets to be shut, were in contrast to the US and Britain, where regulators said they should stay open and no curbs are imposed. 

The intervention by some of Europe’s biggest countries, last seen in the wake of the 2008 financial crisis, also underscores a growing sense of alarm in Europe’s capitals as they scramble to contain a disease that has shut schools and shops.

In short-selling, traders borrow a company stock with a view to selling it, hoping to buy it back later at a lower price and pocket the difference, a practice that often exacerbates market moves amid panic selling.

Italian market regulator Consob said last night it was introducing a three-month ban on net short positions which, for the first time, applied to the entire Milan stock market. 

The move follows two 24-hour short-selling bans adopted by Consob in recent days to curb speculation in a market which has lost almost 40% of its value in less than a month. 

The ruling 5-Star Movement, part of a governing coalition, had even called for the country’s stock markets to be closed entirely. That, however, has not gained wider political support. 

Asked whether stock markets should be closed, French Finance Minister Bruno Le Maire said that other things could be done first, such as banning short-selling, describing that as “a first step to calm things down”.

He said it was important to keep financial markets open so companies can be correctly valued. 

Other countries are hesitant to follow. 

Germany has said it is not planning a ban, while the Dutch financial watchdog said it saw no reason for such a move. 

The splintered response highlights differing views in Europe to financial markets, with Italy and France traditionally more sceptical and interventionist, while Britain, the Netherlands and, to some extent, Germany more liberal. 

The London Stock Exchange said it had no plans to stop trading. 

France is banning short-selling on 92 stocks, the financial markets authority said. Spain imposed a one-month ban that could be extended. 

Such restrictions can wrong-foot hedge funds, who often rely on short-selling to turn a profit in a downturn, as well as to counterbalance other bets they have taken. 

In Italy, hedge funds held 84 short positions as of yesterday compared with 33 in Spain and 20 in Belgium. 

French regulator the AMF reported 728 notifications of changes to short positions in 2020. 

Bridgewater, the world’s biggest hedge fund, has placed a $15 billion bet against European and British companies although it is not clear whether the firm owns more European stocks than it shorts. 

Under European Union law, national authorities have the power to introduce such bans. 

They are required to inform the EU umbrella body, the European Securities and Markets Authority. 

Many countries curbed short-selling around the time of the 2008 financial crisis. While such bans can soften the impact of a shock, however, market experts say they only work for a limited time.

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140,000 workers laid off due to coronavirus

It is estimated that around 140,000 people have been laid off work in Ireland because of the measures taken to tackle the coronavirus.

This is a combination of 70,000 restaurant workers, 50,000 pub and bar staff, and around 20,000 crèche and childcare workers.

Those eligable are being urged not to go to Intreo, the public employment service, offices, to abide by social distancing rules and avoid long queues.

A simplified version of the jobseekers form is available on the website – this must be downloaded, filled out and returned by post.

Additional staff are still being trained so it may be this afternoon before the scheme is fully operational.

The scheme will be accessible for those who do not have a Public Services Card, but the card will help to streamline things.

The Government is to establish a temporary refund scheme for employers forced to cease trading as a result of social distancing measures to help delay the spread of Covid-19.

Where possible, employers are being asked to pay workers at least the equivalent jobseekers’ rate of €203 per week during a six-week period.

The Department of Employment Affairs and Social Protection said employers can claim a refund for the payments under the temporary scheme.

This new temporary refund scheme,will be available to all employees and the self-employed who have lost work as a result of the Covid-19 pandemic.

The Department has said employers can claim a refund for the €203 a week payments to workers.

Individuals applying for the payment will have to apply for normal jobseeker’s payments within the six week period – a simplified application will be available on the Department’s website.

Once that is received, the Department will process the claims and reconcile payments.

Workers who are laid off without pay do not need to visit an Intreo Centre, due to social distancing recommendations.

Refunds are expected to take some time to process, but banks will provide working capital finance in the form of overdrafts, or short-term loans to cover costs.

Meanwhile, the CEO of the Restaurants Association of Ireland has appealed to the Government to issue a directive ordering restaurants and cafés to close. 

Adrian Cummins told RTÉ’s Morning Ireland that they had been expecting to be told to close at the weekend.

“We want to close but they need to tell us so that everybody closes.

“Social distancing is not working in Ireland at the moment and we need to have a national call right across the country that any area where you have the opportunity for collective gathering needs to be now closed down”.

Mr Cummins said that a directive must be issued to ensure no businesses take the opportunity to open.

He said that a number of pubs chose to open over the weekend, while many others closed.

“This needs to happen this morning, in the best interest of the public’s health. I’m appealing to the Government to issue an order for us to close down immediately”.

Mr Cummins said that up to 70,000 employees in restaurants and cafés will be temporarily laid off.

He said this will put a “huge strain” on the social welfare department. He urged employees not to go to the Intreo office and to apply online instead.

Around 80% of cases of Covid-19 will be a mild to moderate illness, close to 14% have severe disease and around 6% are critical.

Generally, you need to be 15 minutes or more in the vicinity of an infected person, within 1-2 metres, to be considered at-risk or a close contact.

There have been 169 cases in Ireland and two deaths to date, with 45 cases of Covid-19 in Northern Ireland.

Governments across Europe have all been using the same charts, showing the same pattern of a steep, narrow peak, bursting through a line representing the capacity of the health service, followed by a gently rising and falling hillock, that is supposed to represent a longer, slower rate of coronavirus infection, one that does not overwhelm the health service.

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Fears for flow of goods after EU border closures

The European Commission (EC) will encourage member states to co-ordinate border closures amid fears that unilateral closures by individual countries could inhibit the flow of goods and critically needed people.

More and more member states have announced restrictions on people entering their territory as the coronavirus continues to spread throughout Europe.

Spain said it was considering closing its borders while Germany has introduced border controls with Austria, Denmark, France, Luxembourg and Switzerland in a bid to stem the coronavirus outbreak.

Last night the Commission moved to restrict the export of protective equipment for healthcare workers to outside the European Union (EU) in order to ensure that member states had sufficient supplies.

The EU has struggled to maintain a coordinated response to the crisis, as countries take unilateral measures to impose restrictions on their borders.

Over the weekend Denmark announced border measures, joining Poland and the Czech Republic who took action to restrict their frontiers last week. The restrictions are not blanket, and some countries have distinguished goods traffic from movements of people.

However, they have caused huge queues in some instances, and prompted EC president Ursula von der Leyen yesterday to warn that shops could face difficulties in stocking supplies that are produced elsewhere in the single market.

The Commission will today issue guidelines as to what health checks member states could operate at their borders. The EC will also launch an initiative to jointly procure with member states testing kits and respiratory ventilators so that countries within the EU hardest hit will be able to get the equipment needed.

At the same time, the Commission last night adopted an emergency measure that would have the effect of restricting the sale outside the EU of personal protective equipment for healthcare workers.

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US Federal Reserve cuts US rates to near zero

The US Federal Reserve has tonight cut rates back to near zero, restarted bond buying and launched other measures from its crisis-era toolkit.

The measures are part of efforts by other central banks to put the floor under a rapidly disintegrating global economy assailed by efforts to contain the escalating coronavirus pandemic.

“The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook. In light of these developments, the Committee decided to lower the target range,” the Fed said.

The Fed cut rates to a target range of 0% to 0.25% and said it would expand its balance sheet by at least $700 billion in the coming weeks.

“The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals,” it said.

In other moves, the Fed encouraged banks to use the trillions of dollars in equity and liquid assets built up as capital buffers since the financial crisis to lend to business and households whose balance sheets and lives have been upended by the virus.

The Fed and five other major foreign central banks also cut pricing on their swap lines to make it easier to provide dollars to their financial institutions facing stress in credit markets.

The Fed, the Bank of Canada, the European Central Bank, the Bank of England, the Bank of Japan and the Swiss National Bank set up swap lines in the financial crisis.

The Fed already cut interest rates by half a percentage point on March 3 at an emergency meeting, the first rate cut outside of a regularly scheduled policy meeting since the financial crisis in 2008.

Policymakers were not due to hold their next interest-rate setting meeting until March 17-18.

US President Donald Trump called the move “terrific” and “very good news.”

Tonight’s joint move by the world’s top six central banks to increase access to US dollars will help to improve liquidity and ease strains in global funding markets, Bank of England Governor Mark Carney said. 

“Today’s coordinated action by major central banks will improve global liquidity by lowering the price and extending the maximum term of U.S. dollar lending operations,” Mark Carney said in a joint statement with Andrew Bailey, who succeeds him as Bank of England Governor tomorrow.

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European markets posted their worst one-day drop in history

European markets posted their worst one-day drop in history today, as investors reacted to US President Donald Trump’s decision to impose restrictions on travel to the US from some countries in Europe.

The pan-European Stoxx 600 had plummeted 11% by the close, with travel and leisure stocks sinking 12.8% following Trump’s announcement of a ban on European travel.

London’s FTSE 100 lost 9.8%, the CAC in Paris shed 12.3% and Germany’s DAX fell 12.2%. Italian stocks finished nearly 17% lower.

The ISEQ Index of Irish shares closed down 10%.

US stocks suffered a historic drop on Thursday as investors dumped equities. The Dow Jones Industrial Average plummeted nearly 9%, or about 2,000 points and was on pace for its biggest one-day percentage decline since the market crash of 1987, when it collapsed by more than 22%.

It is the sixth-worst decline for the Dow in history, according to FactSet. The worst one-day drop of 2008 financial crisis did not hit this low.

The travel ban has ramped up fears the global economy will careen into recession. 

The news came after the World Health Organization officially labelled the outbreak a pandemic and hit out at “alarming levels of inaction” for its spread.

Asian equity markets, already deep in the red in reaction to the WHO announcement, also sank after Trump’s address. 

Tokyo ended down 4.4%, while Sydney lost 7.4% in the ASX 200’s worst day since the 2008 financial crisis. 

Hong Kong closed 4.4% lower, while Seoul, Singapore and Jakarta each lost more than 3%, and Mumbai tanked more than 6% and Bangkok more than 8%.

Manila crashed almost 10% after it emerged Philippines President Rodrigo Duterte would undergo a precautionary test for the virus.

The president, his finance minister and head of the central bank were among several officials who were to go into quarantine. 

The losses followed another brutal session on Wall Street last night with wave after wave of bad news, including Hilton withdrawing its earnings forecast and Boeing saying it would suspend most hiring and overtime pay. 

The Dow Jones fell into a bear market having lost more than 20% since its recent high, and futures pointed to another rout in New York and Europe. 

The coronavirus outbreak has left virtually no sector untouched, though travel and tourism have been particularly hard-hit as countries institute travel bans and quarantine requirements, with Italy in a country-wide lockdown.

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Telecoms firms prepared for increased network demand from remote working

Telecoms companies have said they are equipped to handle any increase in traffic over their networks that may come as a result of more people working remotely.

Many companies had already directed staff to work from home in response to the outbreak of Covid-19. Today the Government urged more employers to use remote working where possible, as part of its new measures aimed at slowing the virus’ spread.

Communications firm Eir said it was prepared for an increase in voice and data traffic on its networks, and there was “ample capacity for all users”.

It said a €1.5 billion investment in its fibre network, along with a €150m investment in its mobile network, would help to provide resilience in the face of additional demand.

As well as services offered under its own brand, the Eir network is used by a number of other telecoms companies to provide services.

Vodafone Ireland said it was prepared to deal with additional demand from users and had a comprehensive monitoring system in place to identify and deal with any localised congestion issues that arise.

“Our aim is to manage the network performance and capacity to maintain the level of service you need and expect from us, and to react to unexpected incidents on our network,” the firm said in a statement.

Siro, which operates a fibre-to-the-home network covering 300,000 premises in the country, also said it had sufficient capacity for an increase in traffic.

It said fibre connectivity was far less prone to suffering from congestion than traditional copper-based networks.

“Each 1 Gigabit SIRO service is capable of managing 400 times the average user speeds observed on the network to date so while we do expect to see increases in traffic (like we saw during the snow event in March 2018) the SIRO network is dimensioned to carry many multiples of the current data traffic,” the company said in a statement

“We are confident that customers on the SIRO network will have their usual best in class uninterrupted service.”

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Telecoms firms prepared for increased network demand from remote working

Telecoms companies have said they are equipped to handle any increase in traffic over their networks that may come as a result of more people working remotely.

Many companies had already directed staff to work from home in response to the outbreak of Covid-19. Today the Government urged more employers to use remote working where possible, as part of its new measures aimed at slowing the virus’ spread.

Communications firm Eir said it was prepared for an increase in voice and data traffic on its networks, and there was “ample capacity for all users”.

It said a €1.5 billion investment in its fibre network, along with a €150m investment in its mobile network, would help to provide resilience in the face of additional demand.

As well as services offered under its own brand, the Eir network is used by a number of other telecoms companies to provide services.

Vodafone Ireland said it was prepared to deal with additional demand from users and had a comprehensive monitoring system in place to identify and deal with any localised congestion issues that arise.

“Our aim is to manage the network performance and capacity to maintain the level of service you need and expect from us, and to react to unexpected incidents on our network,” the firm said in a statement.

Siro, which operates a fibre-to-the-home network covering 300,000 premises in the country, also said it had sufficient capacity for an increase in traffic.

It said fibre connectivity was far less prone to suffering from congestion than traditional copper-based networks.

“Each 1 Gigabit SIRO service is capable of managing 400 times the average user speeds observed on the network to date so while we do expect to see increases in traffic (like we saw during the snow event in March 2018) the SIRO network is dimensioned to carry many multiples of the current data traffic,” the company said in a statement

“We are confident that customers on the SIRO network will have their usual best in class uninterrupted service.”

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Oil rises 2% but set for biggest weekly drop since 2008

Oil prices were set for their worst weekly drubbing since the 2008 financial crisis, despite eking out a 2% today, as investors eyed evaporating demand from the coronavirus pandemic and a production ramp-up by top producers. 

Brent crude was up 70 cents, or 2.1%, at $33.92 in early trade after falling more than 7% on Thursday. 

For the week, Brent is set to fall around 25%, the biggest weekly decline since December 2008, when it fell nearly 26%. 

US West Texas Intermediate (WTI) crude rose 80 cents, or 2.5%, to $32.30 after falling more than $1 earlier in the session. 

WTI is set to drop more than 22% this week, also the most since the height of the financial crisis. 

Just as travel bans, cancelled events and other economic disruptions eat into crude demand, major oil producers are planning to add more crude to an oversupplied market. 

A flood of low-priced oil from Saudi Arabia, the world’s largest exporter, and the United Arab Emirates is intensifying the pressure on prices after the collapse of a price supporting agreement with Russia last week. 

“The surge in low-cost production is significantly larger than expected with the collapse in demand due to the coronavirus looking increasingly broad,” said Goldman Sachs, which now expects what it said would be a record high oil surplus of 6 million bpd by April. 

Russia, the world’s second-largest producer, does not appear willing to return to its agreement with the Organization of the Petroleum Exporting Countries (OPEC). 

Domestic oil producers met with Russian Energy Minister Alexander Novak yesterday but did not discuss returning to the deal, with the head of Gazprom Neft saying they plan to raise output in April. 

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