Economy grew by 'dramatic' 26% last year after considerable asset reclassification

The figures are the strongest performance by Ireland in recent decades and compare to an estimate of GDP growth of 7.8% for 2015. However, much of the rise is a result of aircraft purchases, corporate restructuring and companies re-locating assets to Ireland. These changes have not resulted in a significant increase in employment. The country's Gross Domestic Product expanded by 26.3% in 2015 compared to 2014, while Gross National Product was up 18.7%.  The CSO described the revisions for last year as "dramatic"."The very dramatic increase has increased the capacity for production in the economy and impacts the accounts for 2015 in the increase of exports and imports. Employment has not changed greatly as a result," commented Michael Connolly, a senior CSO statistician. Today's figures show that all the main sectors of the economy grew last year with industry, including building, up by 87%. They also reveal that exports increased by 34.4% between 2014 and 2015, while imports rose by 21.7%. Personal consumption expenditure increased by 4.5%, while Government net current expenditure rose by 1.1%. The CSO said the country's debt-to-GDP ratio will fall to less than 80% as a result of the new figures. But despite the strong results for 2015, figures for the first quarter of 2016 show a 2.1% drop in GDP while GNP grew by 1.3%. Meanwhile, new CSO data also shows the Irish balance of payments current account - a measure of the financial flows with the rest of the world - had a surplus in the first quarter of 2016 of €8.96 billion. The revised current account surplus for 2015 was €26.16 billion, an increase of €22.96 billion on the previous year. Commenting on the figures, Finance Minister Michael Noonan said that they and other indicators, including tax revenue published last week, consumer spending and labour market data are all consistent with an economy where recovery is firmly established. Speaking from Brussels where he is attending a monthly meeting of EU finance ministers, Mr Noonan said the CSO figures show that peoples' lives are improving with more at work than at any time since the onset of the downturn. "Ireland is now in a position where we borrow relatively small amounts at very low rates which ensure that investment is made in delivering more than the bare minimum of services to our citizens. These are all evidence of a country growing in real terms," the minister added. RTÉ

Added: An interesting analysis of a country right next door to Great Britain of which many of its citizens seek citizenship in an EU country, Ireland being a prime contender. 

Bank account for everyone

In Germany, you need a checking account to pay rent and other bills, or get your paycheck. Yet homeless people and asylum seekers are not welcome at banks. New legislation is intended to change all that. In future, banks will no longer be able to reject someone who wants to open a basic bank account. When the government passes its new law, all German banks will be obliged to accept the homeless and asylum seekers as customers. A million people affected. According to Germany's Ministry of Finance, more than a million people would benefit from the basic account. Consumer protection groups estimate a significantly higher number and assume that up to three million people do not have access to a basic bank account. In Germany, there has only been a voluntary obligation for banks to set up accounts for everyone. The government was, however, not satisfied with the implementation. Until now, the homeless and asylum seekers have only been accepted by some savings banks and credit unions. According to the bill, bearers of the basic bank account will receive a bank card and will be able withdraw money and transfer funds. But they cannot overdraw the account. Some politicians criticize the fact that a fee exemption, or at least a cap on fees, is not envisaged in the draft law. A basic payment account should be free of charge – there are demands to reach a consensus on this point before the law is adopted. The law is slated to take effect in June, 2016. Deutsche Welle Photo

Knesset panel okays Israel becoming member of Asian Development Bank By Niv Elis

The Knesset Finance Committee on Monday approved a bill laying out terms for Israel becoming one of 57 founding members of the Asian Infrastructure Investment Bank, China’s answer to the World Bank. Once the bill is passed into law, it will represent the first time Israel becomes a founding member of a global development bank. “Israel’s accession to the Asian Bank is an investment that could generate large economic and political returns in the future,” said committee chairman MK Moshe Gafni (UTJ). The bill, which is expected to pass its second and third readings in the Knesset in the coming week, would allow Finance Minister Moshe Kahlon to finalize the treaty ahead of the bank’s first official meeting in Beijing next week. In March, Israel became one of several major allies to flout US wishes by announcing that it would join the bank. Though the US feels that China is intent on using the bank for political gain, and might undermine the Washington- based World Bank, Israel, the UK, Germany, France, and Australia signed on. “This law will help us a lot,” said Finance Ministry chief economist Yoel Naveh. “This will be the only Asian multi-lateral bank of which Israel is a member.” Israel’s dues for the bank’s $100 billion capitalization will amount to $150 million, plus another $600 million in shares. It will participate in management, and fall into a Korean-led subgroup alongside Mongolia and Uzbekistan, but not have the right to appoint one of the AIIB’s 12 directors. “China surpassed Japan two years ago as the second-largest economy in the world after the United States, and the founding of this bank is a sign of this, and dissatisfaction from the United States as a result was foreseeable,” Zionist Union MK Manuel Trajtenberg said. Despite that fact, he added, the move is a worthwhile investment. Though the committee debated issues such as immunity for the bank’s representatives in Israel, the fact that the terms were similar to those of other international bodies eventually won over all the committee members. Naveh assured a concerned Gafni that large bodies such as the AIIB typically refrain from investing in controversial areas subject to large geopolitical conflict, given that they need the approval of so many member states in order to do so. Zionist Union MK Erel Margalit agreed that Israel’s presence would be strategic. “The Chinese will be a very central part of the world economy, and we must act to ensure that they won’t go just toward Europe and Iran, but also to countries like ours,” Margalit said. The Jerusalem Post Photo                 

Why we need evolution, not revolution By Ewald Nowotny

People are not ready to reinvent Europe. The more promising path is to develop the European Union within the existing framework of the EU Treaties.
It is sad, but true: Sir Karl Popper, the brilliant, down-to-earth philosopher who decisively influenced political discourse in the 1970s and 1980s – especially in Germany – seems to have gone out of style. This unfortunately also applies to the concept of piecemeal social engineering he advocated, i.e. the notion that the ills of society should be confronted through a succession of cautious, incremental steps rather than through rapid, large-scale reform or revolution. After all, small steps can be reversed should they later prove as missteps. The disregard for Popper’s approach is clearly evident in today’s debate about the future of European integration and, in particular, Europe’s monetary policy. Thankfully, the Five Presidents’ Report shows that our continent’s leading minds in the realm of European integration policy wisely distinguish between reforms that are feasible under existing European law and those that require fundamental changes in the European Treaties. Disturbingly, however, the discourse on the future of the EU, and monetary union in particular, has recently been dominated by a growing number of alarmist voices. The adopted tone ranges from dramatic outburst – as recently evidenced by the EU perspective drawn by the French economy minister in this newspaper (“rebirth or death”) – to more moderate, bureaucratic calls for an “economic government” or a “European finance minister.” Obviously, monetary union is bound to be more stable and more efficient if it is the final milestone of integration, following achievement of a political union and a common fiscal policy in particular. This was already argued by the proponents of the so-called “coronation theory” when the blueprint for European Economic and Monetary Union was first discussed, drawing from the experience of German unification in the 19^th century. That said, it is equally true that a European single market needs to be complemented and stabilized by a single currency that is shared by a large number of market participants. Also true: as a “second-best” yet feasible solution, the single monetary policy is supported by clear fiscal policy rules as laid down by the Stability and Growth Pact. In the early stages of monetary union, missteps did indeed occur. In particular, the lower interest rate levels of a few southern European Member States led to excessive private and/or public debt. Though there were warning signs, i.e. massive current account and budget deficits, national and European economic policymakers reacted too late. Exacerbated by the global financial crisis from 2007, this led to dramatic developments in some countries that continue to affect policymaking in the euro area today. It should not be overlooked, however, that this crisis situation has also brought forth a series of instruments at the European level which represent significant progress in terms of crisis prevention and intervention. If these new instruments are applied in a consistent and macroeconomically responsible manner, and maybe combined with a strengthened role for market-based sanction mechanisms, the outlook for European monetary union is quite sound, actually. Calls for a fundamental restructuring of the EU’s institutional framework may well have their place in a discussion of long-term developments, but as a contribution to current political debate the “rebirth or death” approach is extremely dangerous, in my opinion.
The chances of a “big bang” reform are slim – unfortunately
Following this approach would at some point or another require far-reaching changes to the European Treaties. Granted, treaties can be changed, and instigating an informed public debate in due time it is part of the job of politicians. Claiming that the people are ready for a “re-founding of Europe,” a big bang as Minister Macron suggested in his commentary in this paper, is an interesting intellectual hypothesis, but its validity has not been substantiated by empirical analysis. In times like these when we do not know which countries will be part of the EU in two years’ time and each individual Member State has the power to block Treaty changes, the probability that fundamental changes to the existing Treaties will be adopted in the not-too-distant future is – unfortunately – very small. Against this background and in light of the sheer impossibility of fundamental Treaty changes, arguing the case for a “rebirth or death” approach means, in fact, risking the danger of conjuring up “death” – the slow dissolution of the EU and monetary union. Proposals founded on unrealistic conditions do not represent a useful contribution to the future development of Europe; on the contrary, they may even adversely affect political and economic expectations. Apart from the political and psychological risk of advocating “rebirth or death,” such an approach is not factually justifiable. Despite its much debated weaknesses, Economic and Monetary Union has proved its worth more than once in the first 16 years of its existence: Without EMU, Europe would have seen far more dramatic repercussions of the global economic crisis that started in 2007; this is true both for the members of EMU and for the EU countries outside monetary union, which, to some extent, benefited as “free riders.” As money and capital markets were breaking down and volatility was high, and swift and major action was of the essence, no national central bank – not even that of a big country – would have been able to readily provide the massive amounts of additional liquidity with which the ECB stepped in. A large central bank by global standards, the ECB must fear potential liquidity outflows much less than other central banks and was able to participate in the swap network of the leading central banks, which has the power to prevent potentially disastrous liquidity shortages in individual currencies.
Instead of invoking apocalyptic scenarios we should adopt a policy of small steps
Given the establishment of the ESM and its predecessor institutions at the EU level, we have instruments in place to tackle crises in a spirit of solidarity; this is substantial progress. The application of these instruments may be controversial. However, as the case of Spain demonstrates, we are also making progress here: Recent economic developments in the country are considered to be the success of a policy of austerity that did not coerce the government into slashing its fiscal deficit of 4.5% within too short a period of time. The substantial strengthening of economic governance in the EU over the past few years (e.g. through the introduction of the European Semester, the reform of the Stability and Growth Pact) as well as the establishment of the Single Supervisory Mechanism for the euro area marked important progress toward a more complete economic and financial market union. Hence, instead of invoking apocalyptic scenarios it seems more useful and effective to contribute to a step-by-step enhancement of economic governance under the given legal framework and to push ahead with the thorough implementation of decisions that have already been made, such as the Juncker plan for investment in Europe. There is no doubt that like any other institution, the EU must develop long-term political and economic visions. However, especially for a comparatively young organization like the EU, building a great narrative that creates an emotional connection is of vital importance. Many European countries have come to reach a form of emotional cohesion through the great narrative of the catastrophes they have gone through together or through wars waged against a common enemy. Let’s hope that emotional cohesion in Europe will be built through positive rather than negative events. It seems all the more important to me that long-term change is achieved on the basis of an evolutionary and democratic concept of gradual progress rather than by launching technocratic plans as a matter of life and death.
Ewald Nowotny is governor of the National Bank of Austria and member of the the governing council of the European Central Bank. International Süddeutsche Zeitung Photo

Xi Hosts 56 Nations at Founding of Asian Infrastructure Bank By Jane Perlez

BEIJING — At a ceremony imbued with quiet triumph at the Great Hall of the People, China’s president, Xi Jinping, hosted 56 member countries on Monday for the founding of a Chinese-led infrastructure bank for Asia, including major American allies from Asia and Europe that Washington had counseled not to join the bank. Conspicuously absent from the gathering were the United States and Japan, the leaders of the World Bank and the Asian Development Bank, the institutions that were created after World War II to build a Western-designed global financial architecture. Washington fears those institutions will be undermined by the new body. The country’s powerful treasurer, Joe Hockey, bearing a $700 million contribution that will make Australia the fifth-largest shareholder of the bank, said before the ceremony that the bank offered “great opportunities” for Australia to work with China, its biggest trading partner. Britain, which also joined in defiance of Washington’s wishes, sent Jim O’Neill, commercial secretary to the Treasury. The new bank is the first large international body established by China that, like the World Bank and the Asian Development Bank, meets the standards of the Vienna Convention on the Law of Treaties, legal experts said, and as such could be seen as an effort by China to shoulder more responsibility in underdeveloped parts of Asia, even as some neighbors fear its growing military and territorial claims. Some of the early sour feelings expressed by competitors of the new institution had dissipated by Monday. The president of the World Bank, Jim Yong Kim, said in a statement that he welcomed the newcomer, and the Asian Development Bank offered to join hands to do business. China will be the biggest shareholder in the bank, which aims to have $100 billion in capitalization. Beijing will contribute $29.8 billion, with India a distant second at $8.4 billion, the articles of agreement show. In all, the members range from Western Europe, to Russia, to the Middle East — including Iran and Israel — to the Asia-Pacific region. China, for example, has insisted that the bank be led by a Chinese official, and almost certainly, these people say, the first president will be Jin Liqun, the head of the interim secretariat of the bank and a former deputy finance minister. “The United States always has an American as head of the World Bank, the Europeans always get the head of the I.M.F., and the Japanese head the A.D.B.,” Mr. Dollar said, referring to the International Monetary Fund. “The United States should join at an early date since China is still open to its participation,” said Mr. Xu, head of the economic studies department at the China Center for International Economic Exchanges, a think tank associated with the National Development and Reform Commission, the top state planning body. “We welcome the U.S. to join.” International New York Times Photo-www.aei.org

Asia stocks rise amid continuing optimism on Greek debt deal By Yuri Kageyama

TOKYO (AP) — Asian shares rose Wednesday, and Japan's benchmark hit an 18-year high, amid optimism about a bailout deal between Greece and its creditors. KEEPING SCORE: Japan's benchmark Nikkei 225 added 0.5 percent to 20,922.00, its highest in 18 years. South Korea's Kospi was little changed at 2,081.19. Hong Kong's Hang Seng edged up 0.1 percent to 27,355.97. Other regional stock markets were mostly higher, including Taiwan, Singapore, Thailand and the Philippines. GREECE HOPES: Greece faces defaulting on its debt without new loans, but appeared to be moving closer to an agreement to secure new funding. A Greek default and the nation's potential exit from the euro currency could shake financial markets. EYES ON FED: Investors also remain focused on when the U.S. Federal Reserve might increase its key interest rate for the first time in nearly a decade. Fed Gov. Jerome Powell said at an event hosted by the Wall Street Journal on Tuesday that he expects the U.S. central bank to begin raising its benchmark interest rate in September, with a second rate rise coming in December. THE QUOTE: "The risk appetite in Asian markets may wane a little if we were to take cues from overnight markets. Gains in European equities, while still rather strong, are not as impressive as that on Monday," said Bernard Aw, market strategist with IG in Singapore. WALL STREET: The Dow Jones industrial average rose 24.29 points, or 0.1 percent, to 18,144.07 on Tuesday. The Standard & Poor's 500 index added 1.35 points, or 0.1 percent, to 2,124.20 and the Nasdaq composite rose 6.12 points, or 0.1 percent, to 5,160.09. ENERGY: Benchmark U.S. crude for August delivery rose 13 cents to $61.14 a barrel in electronic trading on the New York Mercantile Exchange. The contract for U.S. crude for July delivery expired at $59.68. Brent crude, a benchmark for international oils used by many U.S. refineries, rose 5 cents to $64.50 in London. CURRENCIES: The euro was little changed at $1.1183. The dollar cost 123.86 yen, up slightly from 123.62 yen in the previous trading session. SFGATE

MOVES-JP Morgan names Callum Mitchell-Thomson head of investment banking, Germany By Anet Josline Pinto at REUTERS

Dorothee Blessing

March 2 (Reuters) - Wall Street bank JP Morgan Chase & Co appointed Callum Mitchell-Thomson head of investment banking for Germany, according to an internal memo seen by Reuters on Monday. Mitchell-Thomson, who has been at the bank for 18 years, will report to Dorothee Blessing, JP Morgan's vice chairman of investment banking in EMEA. The appointment will help strengthen JP Morgan's investment banking franchise in Germany, the memo said. Feb. 27 (Bloomberg) By Angela Cullen & Annette Weisbach -- Dorothee Blessing, who rose to become co-head of investment banking for Germany and Austria at Goldman Sachs Group Inc. in a career spanning two decades, is leaving the U.S. investment bank and securities firm. Blessing, 45, has decided to retire from Goldman Sachs after “20 years of distinguished service,” according to an internal memo obtained by Bloomberg News today. Her departure was first reported by German publication Manager Magazin, which said she’s leaving for personal reasons. The investment banker, who is married to Commerzbank AG Chief Executive Officer Martin Blessing, was named managing director in 2001 and partner in 2005. She joined Goldman Sachs in 1992 as a Frankfurt-based financial analyst in the corporate finance department. Blessing left the investment bank briefly in 2004 to take up a post at Deutsche Bank AG in Frankfurt before returning to the company.

Blessing, a mother of three, comes from a banking dynasty, following in the footsteps of her father Paul Wieandt, the former chairman of savings bank Frankfurter Sparkasse.Yahoo! Finance Yahoo! Bloomberg

ECB board member says no deflation in eurozone By AFP

Berlin (AFP) - ECB board member Sabine Lautenschlaeger has disputed in a magazine interview that the eurozone is now experiencing deflation and expressed skepticism about the central bank buying up sovereign bonds. Markets surged this week as investors bet data showing prices fell year-on-year in the eurozone in December would push the ECB to launch massive purchases of government bonds, only to slump back on indications it may act cautiously. "We are seeing persistent weak inflation, due to among other things the prices of energy and food having fallen sharply," Lautenschlaeger said in an interview with the weekly Der Spiegel due to hit newsstands on Saturday. The 0.2 percent drop in consumer prices is the first fall in consumer price inflation in the eurozone in five years, and many analysts warn low energy prices could keep prices falling for an extended period. Deflation is defined as an extended period of falling prices where consumers begin to put off purchases in expectation they will fall further, sparking a damaging cycle of falling production, employment and prices.

The ECB has been watching warily as inflation fell further away from its target level of just under 2 percent last year as oil prices tumbled by half. ECB chief Mario Draghi has said the central bank could launch a quantitative easing (QE) programme of purchasing government bonds like the US Federal Reserve did during the global financial crisis to protect the eurozone from deflation. Some analysts see the ECB as now having little choice to do so at its next meeting on January 22. But Lautenschlaeger, who was formerly a deputy head of the German central bank, said "the purchase of sovereign bonds is for me the last option in monetary policy." "The benefits and the risks of such a programme should counterbalance in a reasonable manner, and for me that isn't currently the case," she added. Bloomberg news agency reported on Friday that the ECB governing council has been presented scenarios including purchases of up to 500 billion euros ($591 billion) in investment-grade assets. Markets were disappointed with that amount which is only half of the 1.0 trillion euros in the expansion in its balance sheet that the ECB has targeted to ward off deflation. Yahoo! News Sueddeutsche.de

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Millions of Finns to enjoy tax refunds By Alex

Finland’s tax administration is to pay out more than two billion euros to the country’s taxpayers who paid too much over the course of 2013. Tax authorities in the Nordic country say that 3.3 million people are to receive refunds on taxes paid last year. The total amount to be paid out is 2.2 billion euros, which equates to an average of 658 euros per person. A lucky 711,000 taxpayers are set to enjoy a very merry Christmas, receiving more than 1,000 euros in returns – a sum that amounts to 65 per cent of what the taxman is dishing out. These refunds are likely to start being paid into bank accounts on 3 December. IceNews