Mixed messages from Europe on debt


Cantillon:Ireland remains twisting in the wind following the leaking of a draft report on how the new European Stability Mechanism would get involved in bank rescues.

According to the draft report, problem countries would either have to invest alongside the ESM or guarantee the ESM for any losses it might incur as a result of bailing out member states’ banks.

Reconciling this proposal with the European Council’s commitment to break the toxic link between busted banks and indebted sovereigns is not easy. Little wonder, then, that the commission’s spokespeople did not bother trying when questioned yesterday.

They chose instead to repeat the European leaders’ promise “to break the vicious circle” which had been reiterated as recently as December 14th.

It is all somewhat Jesuitical and leaves open the prospect of some sort of fudge that will neither convince the markets nor lift the burden on the Irish exchequer and make Ireland’s debt sustainable.

However, the game is far from over and Ireland continues to exert what pressure it can. Stefan Gerlach (pictured), deputy governor of the Central Bank, was doing his bit in this regard yesterday when he gave the Berlin Finance Lecture organised by Deutsche Bank and Humboldt University .

“The stock of public debt is very large, the level of mortgage arrears is still high and banks are not yet profitable, The safety margin is therefore small,” he told the assembled – mostly German – “politicians, regulators, industry representatives and academics, before concluding that debt sustainability would greatly enhance the prospects of a successful exit.

Ardagh to add yet another touch of glass

Fresh from three acquisitions last year, glass bottle and metal container group Ardagh yesterday announced that it is close to getting another one in the can.

The group confirmed that it has offered €1.275 billion to buy Verallia’s US operations from Saint-Gobain.

It plans to pay for the deal, which has first to get the green light from US regulators, by issuing $1.45 billion in euro and dollar bonds.

Since it purchased Impress Co-operative in the autumn of 2010 for €1.7 billion, Ardagh has been steadily buying up rivals, building a business that now has sales of €5.4 billion a year and a list of blue-chip clients, such as Budweiser owner, InBev; its rival, Heineken; and Coca-Cola.

It has borrowed money to pay for many of these. It paid for Impress through a bond issue combining €1 billion and $800 million.

Early in 2011, not long after it announced the Impress deal and associated bond issue, it borrowed a further €200 million to finance more acquisitions.

Last year, when it announced that it was buying Anchor Industries for more than €700 million, it said it would finance the deal through a $920 million bond.

When it went to the market, the offer was eight times oversubscribed, meaning that, in theory at least, it could have raised in the region of €6 billion.

Ardagh has few problems raising cash to fund its transactions.

It has issued about €2.7 billion worth of bonds since the Impress deal went through in late 2010. Lenders clearly think that it is a good bet.

In 2011, the company announced plans to float, but subsequently put them on hold, as it became clear that the turmoil that gripped the markets was not going to end any time soon.

It is committed to floating, once there are real signs that the turbulence has passed.

Given the ease with which it has been able to raise cash to date, it looks like it can get along without the troublesome equity markets for now.

Online time-wasting that’s worthwhile

For those who have time to waste and want to do so on the internet, socialbakers.comis a reasonable port of call.The Czech-based social media monitoring start-up, backed by Index and Earlybird venture funding, has gained significant traction among big business and brands keen to assess their impact on social networks.

On the site you can look at what pages, brands and Twitter accounts etc are getting the most interest in your country and advertising data such as cost per click or per thousand impressions.You can also do a “fake follower check” to “determine the authenticity of your followers” on Twitter.

For Facebook, the latest stats say Ireland has 2.25 million users, and a 72.1 per cent penetration of the online population. For the population generally, the penetration is 48.7 per cent.

That is a huge number considering the fact that children under 13 shouldn’t be on the service, and older people (say more than 65) tend not to be.The number of users of the site grew by 127,060 over the past six months, according to the site.

More than half of all users were aged 18 to 34. The top five Irish Facebook pages indicate that our musicians are our most popular product among the global Facebook population, with some competition from alcoholic drink.

The top Irish pages, in descending order, are: U2, the Script, the Cranberries, Baileys (the drinks brand), and Enya.This music-leaning impression is reinforced by the stats on Irish Twitteraccounts that the service monitors and which show that Niall Horan (@NiallOfficial) of boy band One Direction has by far the most popular account, with 8.9 million followers. The second ranked account is Tim O’Reilly, (@timoreilly) the Cork-born US-based businessman and open source activist. The third is our very own Jedward (@planetjedward), who have 734,358 followers.

Overall, the figures and data on most popular sites/accounts etc indicate that when it comes to time-wasting, the Irish are no slouchers.

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