Barnier bites his tongue as DUP comes out swinging

Business Week: Also in the news were economic updates, taxes, and jobs won and lost

EU chief negotiator Michel Barnier dropped into the Guildhall in Co Derry this week to meet some schoolchildren as part of his visit to the Border region. "Do you have a difficult job, Mr Barnier?" asked one. "Yes, very," he replied.

They don't know the half of it. Before he'd even arrived, DUP leader Arlene Foster was out swinging. Barnier didn't understand unionist culture, was "very aggressive" and "not an honest broker". What's more, he wasn't to hear any pro-Brexit voices on the trip.

Perhaps nobody told her that unionist MEPs Diane Dodds and Jim Nicholson declined the invitation to meet him. Luckily, Barnier isn’t the sensitive type. He said he would not engage in “polemics” and insisted his “door is open” to Foster and the DUP.

But then it was back to the task at hand. Barnier said the “backstop” proposal was only one possible outcome, and that the EU was “open to any solution” that would protect the Belfast Agreement. Without a solution, though, there was a “real risk” of no deal.

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Meanwhile in London, UK prime minister Theresa May convened her “Brexit war cabinet” to thrash out a way forward on the divisive issue of customs arrangements after Britain leaves the bloc. In the event, they were unable to agree on any solutions.

There were suggestions later that May’s new home secretary, Sajid Javid, and defence secretary Gavin Williamson, joined Brexiteer ministers opposed to the “customs partnership”, which would see Britain collect tariffs on behalf of the EU.

In the House of Lords, Brexit secretary David Davis said the Border question might have to wait until an arrangement has been made on customs, something the EU has consistently ruled out.

In something of a coup for Dublin, the House of Lords backed a move to prevent a hard border after Brexit, with EU commissioner Chris Patten, who proposed the amendment, accused by hardliners of “playing with fire”.

“I will tell you what I think playing with fire is,” Patten replied. “Blundering into the politics of Northern Ireland with a policy which is sometimes clueless and sometimes delinquent, with a can of petrol in one hand and a box of matches in the other.” So there.

May’s government earlier suffered a major defeat in the House of Lords, which voted to allow parliament to reject a withdrawal agreement without triggering an exit with no deal.

Positive GDP forecast

What with such little progress – or even the prospect of progress – in the Brexit talks, the need to plug any economic leaks has grown in urgency.

The European commission in its latest forecast said the Republic’s gross domestic product (GDP) will grow at 5.7 per cent in 2018 – up from 3.8 per cent projected previously. Stockbroker Davy thinks the same and expects consumer spending to accelerate and new mortgage lending to increase sharply.

That being said, the latest exchequer returns were published, showing the Government collected €200 million less than expected in tax during the first four months of the year. Corporation tax generated €618 million, which was 3.1 per cent below target.

It’s not just Brexit the Government has to worry about. Moves afoot in Brussels to tax digital giants like Google and Facebook in the State they provided their service could cost the Republic up to €160 million in tax revenue, Revenue said.

However, the European Commission’s proposed 3 per cent tax on digital services received a cool reception from EU finance minister at an informal Ecofin meeting in Sofia, so the plans have a long way to go yet.

All of this when many people are still struggling to feel the recovery. A new report from the Central Statistics Office on “measuring Ireland’s progress” found the Republic was the fourth most expensive place to live in 2016.

That being said, it actually got less expensive to live here when compared with other EU states, and we were named the most productive nation in the EU. However, it also said there is still a significant cohort of people living in jobless households.

What’s worse, research carried out by Prosperous Financial found it could take the average worker renting in Dublin up to 21 years to save enough to buy an average house in the capital.

On the housing supply side, Minister for Housing Eoghan Murphy told the National Construction Summit in Dublin that “tens of thousands” of apartments must be built to resolve the current housing crisis.

Unemployment figures look set to get even better

It’s almost 10 years since the bank guarantee, if you can believe that, and unemployment levels have been steadily dropping back to pre-crisis levels.

The latest figures from the CSO showed the seasonally adjusted unemployment rate for April was down almost 1 per cent to 5.9 per cent from 6.8 per cent in April 2017. That’s the first time since May 2008 that it has been below 6 per cent.

It seems things could be about to get even better too, with hundreds of new jobs announced this week. The most significant of these was in Dundalk where WuXi Biologics are to set up shop with 400 new hires.

The company is a major Chinese biopharmaceutical group. It said it would invest €325 million to develop a new manufacturing facility on IDA Ireland’s greenfield site in Mullagharlin.

In Co Longford, manufacturing company Finesse Medical is to create 200 jobs over the next four years, while a new tourist attraction in Dublin called the Vaults, due to open in the John’s Lane area of Thomas St in July, will bring 50 more.

There was bad news in neighbouring Athy, Co Kildare, however, as Coca-Cola announced plans to close its plant, resulting in the loss of all 82 jobs. The plan is to move production to its higher capacity facility at Ballina Beverages in Co Mayo.

Finally, as many as 2,000 jobs could be created in the hardware sector between now and 2020, according to a forecast from Hardware Association Ireland, as the Republic’s housebuilding recovery continues apace.