Brexiteers spitting mad as Dublin refuses to be bullied

Business Week: also in the news were the banks, Airbnb, housing and credit unions

Speaking on the third day of EU summit meetings in Brussels, Taoiseach Leo Varadkar has said that a longer Brexit transition is not an alternative to a Border backstop, Video: EU Council

 

Let’s hope Taoiseach Leo Varadkar isn’t the sensitive type. With Anglo-Irish relations plumbing new depths over the past year as the UK slowly began to realise the Republic will not be browbeaten on Brexit, some of the UK’s less savoury elements have started spitting invectives.

The DUP’s Brexit spokesman Sammy Wilson branded Varadkar “vile” and accused him of using victims of terrorism to scaremonger. Other choice adjectives from Wilson included “despicable, low and rotten”.

Elsewhere, Harry Cole, Westminster correspondent with the pro-Brexit Sun newspaper, said Varadkar was “at his smug and insufferable best” for suggesting the British hadn’t considered the effects of Brexit on Ireland.

Meanwhile Varadkar and the Government are just getting on with it. An “offer” from UK Brexit secretary Dominic Raab for a longer transition period for the UK in exchange for dropping the backstop demand was described as “strange” by the Taoiseach.

“An extension of the transition period would be a concession to the United Kingdom because it would be asking for it, asking for more time to prepare to put Brexit into real effect,” he told the Dáil.

Earlier in the week Northern Secretary Karen Bradley sought to reassure Dublin when she said the British government would not allow a border on the island of Ireland “in any situation”.

Whatever about the backstop, there remains the possibility the UK will crash out of the bloc in March without a deal. Ryanair chief executive Michael O’Leary this week said the risks of such a scenario have “risen materially”.

As a result, the airline, which has returned more than €6 billion to shareholders over the past decade, pressed the pause button for at least six months on further stock repurchases. He was speaking after Ryanair posted a 7 per cent slump in first-half profits to €1.2 billion.

More generally, Irish business sentiment slipped to a six-year low in the third quarter in the latest KBC Bank and Chartered Accountants Ireland survey. Economist Austin Hughes said Brexit was “overwhelmingly seen as an unclear and present danger”.

On the other side of the coin, Barclays chief executive Jes Staley said the British banking giant has got the green light from the Central Bank in relation to its expansion plan in Dublin after Brexit.

Bankers

The Government was dealt a blow on Friday as AIB chief executive Bernard Byrne announced he would be quitting the majority State-owned bank he has led since May 2015.

The move will heap pressure on Merrion Street as it considers remuneration and the politically toxic return of banker bonuses in bailed-out banks. The argument, of course, will be that in order to get the best you have to pay the best.

Staying with the banks, Ulster Bank made a loss of €87 million in the third quarter of 2018, compared with a profit of €36 million during the same period the year before, results from its parent Royal Bank of Scotland showed.

Bank of Ireland issued a trading statement that was broadly in line with market expectations, but it moved to rein in investors’ expectations surrounding next year’s payout.

The group, led for the past year by chief executive Francesca McDonagh, said its loan book rose by €500 million to €76.6 billion in the 12 months to the end of September, leaving it on track for the first expansion since the onset of the financial crisis in 2008.

If Minister for Finance Paschal Donohoe does decide to relax pay restrictions for bankers perhaps he will point to a new law coming in next year that will give the Central Bank more powers to make top bankers accountable for failings on their watch.

Separately, the Central Bank could be about to lose one of its top officials. Sharon Donnery, a deputy governor, is one of the two contenders nominated by MEPs to head the euro zone’s bank supervisory operation. A decision will be made on Monday week.

Housing crisis

The banks look set for a little more competition in the mortgage market as the Central Bank has proposed easing the long-term lending restrictions imposed on credit unions to allow them grow their mortgage and commercial loan books.

The Irish League of Credit Unions said it would allow them to become “significant players” in the mortgage market. Under the plan all credit unions would be allowed to lend for housing and commercial loans to a limit of 7.5 per cent of their total assets.

An increased concentration limit of 15 per cent would be available, subject to the Central Bank’s approval, for unions that can demonstrate that they have financial firepower.

Staying with housing, the Government’s latest attempt to ease the crisis is to tighten the rules around allowing properties in areas of high housing demand to be used for short-term lets – such as Airbnbs.

Owners of buy-to-let properties will have to get planning permission from local councils if they want to use their second homes or apartments for short-term lets for more than three months every year. Only owners of second properties will have to apply.

Most commentators are unanimous that more supply is needed though, and house builder Victoria Homes has expanded the planning application for its site in Carrickmines, south Co Dublin, to include up to 1,500 homes.

This is nearly double the number of units contained in the original plan for the Glenamuck Road site, making it the largest residential development undertaken in the State since the recession.

Finally, accounts from Ireland’s largest estate agent Sherry FitzGerald showed the number of new homes it sold almost doubled to 1,500 last year, while the average price paid for all homes sold by the estate agent rose by 7 per cent to €351,000.

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