Boris Johnson gets lecture from Macron on the Troubles

Business Week: also in the news were recession fears; China; and home building

French president Emmanuel Macron has told British PM Boris Johnson that two core objectives must be upheld in any further Brexit negotiations - stability in Ireland and the integrity of the single market.

 

You can always trust the French not to mince their words, and Emmanuel Macron – the young, dynamic president of the republic and one of Europe’s most progressive leaders – is no exception.

Receiving UK prime minister Boris Johnson in the courtyard of the Élysée Palace this week, Macron set the tone by hoisting French and EU flags – but no British ones. While remaining courteous and respectful, he seemed in no mood to mollycoddle his guest.

Johnson, with his abhorrence for the backstop, did not take seriously enough the risk of reigniting the conflict in Northern Ireland, Macron implied. “There are still families whose children, brothers and sisters died in this conflict,” he said.

“To think of reviving that, because it suits us, would be irresponsible. I consider that Irish peace is European peace. We must not allow it to be threatened by a political and institutional crisis in Britain.”

The remarks could almost have been scripted in Dublin, and Macron went even further with the suggestion that Irish reunification and integration of the entire island in the EU “would solve all the problems”. To be a fly on the shoulder of Arlene Foster.

Days earlier, Johnson was greeted in Berlin to shouts of “No Brexit” from a hostile crowd camped outside the Berlin chancellery. Angela Merkel – hosting her fifth British prime minister – told Johnson the onus to find an alternative to the backstop was on him.

If he could do so within a short timeframe, Merkel said she would listen to proposals to change the withdrawal agreement, although there is no expectation in Berlin, Paris or Dublin that it can be done.

Nonetheless, the usual suspects in the British media celebrated the “concession” won by Johnson. “We can Merk it out,” cried the Sun on its front page.

All the while, UK government borrowing surged in the first four months of the fiscal year. The budget deficit between April and July stood at £16 billion, 60 per cent more than the same period last year.

Meanwhile, fears of a no-deal Brexit are growing by the day. Ireland’s European Commissioner Phil Hogan said such an outcome would create a “foul atmosphere” between the parties and would have “serious consequences” for any future trade deal.

The implications for the Border were laid bare by a report from the Food Research Collaboration, which pointed out that we will be legally obliged to apply controls to food entering the country from the UK in the event of a no-deal Brexit.

It would be “hard to exaggerate the disruption” this scenario would cause, it said, with some food businesses in Northern Ireland suggesting they could go out of business within three days.

Separately, a secret UK planning dossier called Operation Yellowhammer warned of “meltdown” at English Channel ports, with delays of two days and a severe bottleneck for Irish hauliers bound for Europe.

On the bright side, Irish motorists will no longer need “green cards” to cross the Border in the event of a no-deal Brexit thanks to an agreement between transport authorities in the UK and the Republic.

Global recession fears persist

“The economy is doing very, very well,” US President Donald Trump shouted over the drone of the Marine One helicopter as he approached reporters on the lawns of the White House this week.

Despite his assertion, there are growing fears for the US economy, and indeed the wider global economy, with a second inversion of the US Treasury yield curve.

Let’s not get bogged down in the jargon – that particular phenomenon is basically a indicator of a recession, and a reliable one at that. This was the second week in a row it occurred and it has preceded every US recession of the last half century.

Trump has blamed the US Federal Reserve for the worsening situation. Its officials convened in Jackson Hole, Wyoming, this week as onlookers looked for signs that the central bank is on course to deliver another cut in interest rates next month.

Everyone else though seems to think the problems stem from the increasingly bitter trade war between Washington and Beijing. Markets have seen wild swings as fears that its slowing economic effects could tip major economies into recession.

China announced on Friday that it would apply additional tariffs of between 5 and 10 per cent on $75 billion (€68 billion) of US imports from September, marking the latest escalation.

Staying with China, and tech giant Huawei said the impact of US trade restrictions on its business will be less than what it initially feared, though the curbs could push its smartphone unit’s revenue lower by about $10 billion this year.

Huawei Technologies’ $100 billion business has been hit hard since mid-May after Washington blacklisted the world’s second-largest smartphone maker, cutting off its access to essential US components and technology.

Separately, new figures this week showed Chinese foreign direct investment into the Republic of Ireland rose by 75 per cent to $142 million (€128.2 million) in the first six months of the year.

More homes being built

The clamour to build homes continued this week as Irish Residential Properties Reit was granted planning permission for almost 430 apartments at Rockbrook in Sandyford, Dublin 18.

The hope for house buyers is that the increased supply will drive prices down, and a Central Bank survey found that almost 40 per cent of chartered surveyors expect Dublin house prices to decline by the middle of next year for that very reason.

On the commercial property front, the value of development land sales rose to €490 million in the first half of this year in spite of a more than 50 per cent fall in transactions, according to research from Cushman & Wakefield.

Separately, a report published by GeoDirectory, a body backed by An Post and Ordnance Survey, found the commercial vacancy rate across the State rose 13.3 per cent in the second quarter of this year.

Finally, the five-star Westin Hotel in Dublin has added 19 new double rooms above the neighbouring AIB branch on Westmoreland Street as part of a €5.5 million extension and refurbishment of the property.

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