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Wednesday 23rd May 2018

Fund aims to strengthen public finances and improve Irish economy’s resilience to external economic shocks

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe T.D., today (Wednesday) welcomed the Government’s decision to approve drafting of a Rainy Day Fund Bill.

Announcing the decision, the Minister said: ‘The Rainy Day Fund is an important element of this Government’s strategy to strengthen public finances and improve the Irish economy’s resilience to external economic shocks. Setting up the Fund is part of a prudent budgetary and financial strategy, and will fulfil an important commitment in the Programme for a Partnership Government’.

Minister Donohoe set out his plans for the Rainy Day Fund in the Summer Economic Statement 2017, and again in Budget 2018. His intention is to transfer an initial tranche of €1.5 billion from the Ireland Strategic Investment Fund (ISIF), with further annual contributions of €500 million each year from 2019 to 2021. This will see the Rainy Day Fund reach €3 billion by the end of 2021.

The purpose of the Fund is to act as a counter-cyclical buffer to protect against severe economic shocks. The proposals also allow the annual €500 million to be held as an in-year ‘contingency reserve’ so that, in the event of an unforeseeable natural or other disaster, some of the annual contribution may instead be spent on remedying the effects of that event.

Commenting on the Fund, the Minister said: ‘We have seen in our recent history just how vulnerable Ireland is to external economic shocks. We have worked very hard to stabilise our public finances, and it is vital that we build on this work and put in place longer-term mitigation strategies that can help protect us against extremes in the economic cycle. I intend to advance this legislation as soon as possible to achieve this goal’. 

Ends 

Note for Editors

The purpose of the Rainy Day Fund is to mitigate severe economic shocks, in excess of the normal fluctuations of the economic cycle. In view of the unpredictability of such events, the Minister does not propose detailed economic triggers: this is to ensure that time-lags in assessing such triggers do not operate to make the Rainy Day Fund essentially inaccessible in case of need.

The drawdown criteria will be based on an assessment by the Department of Finance. Based on this the Minister of the day may ask Government to decide that drawdown is justified; if Government agrees, the Minister will then seek a resolution of the Dáil authorising drawdown of funds to the Exchequer.

This process ensures that Dáil Éireann will be fully involved in any future decisions regarding drawdown, and further decisions on expenditure of the monies will be subject to voted expenditure procedures.

The in-year contingency reserve is intended for events which are not reasonably foreseeable, such as, for example, a recurrence of foot-and-mouth, or multiple very severe weather events.

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21.5.2018

Minister for Financial Services and Insurance, Michael D’Arcy TD is in Galway today (Monday) as part of a series of regional events to update on the Government’s work to address the cost of insurance. The meeting, arranged by the Department of Finance, will be attended by local businesses, public representatives and business groups.

Speaking ahead of the meeting, Minister D’Arcy said “These regional meetings provide an important opportunity for me to hear first-hand from local businesses across the country, about the issues they face in obtaining insurance. I am aware of the considerable impact that the cost of insurance has on businesses and acknowledge that some premiums are very difficult to justify. The Government has prioritised work to address rising costs for individuals and businesses, and as Chair of the Cost of Insurance Working Group, I can confirm that significant efforts are being made to address many of the issues in the sector which will ultimately lead to a more stable insurance market.”

As part of his visit to Galway, Minister D’Arcy will also conduct a round table with IFS companies as part of the regional focus of the Government’s five year strategy for the International Financial Services sector, IFS2020.

Monday 21st May 2018

ENDS

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Friday, 18th May 2018

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, on behalf of the Government, confirms that the collection of the alleged State aid from Apple has commenced today (Friday) with the payment of the first tranche of [circa €1.5 billion] being deposited in the Escrow Fund. This is the first of a series of payments with the expectation that the remaining tranches will flow into the fund during Q2 and Q3 of 2018 as previously outlined.

There will be no further official comment on collection of the alleged State aid until the full recovery has been effected which is expected by the end of Q3 2018.

The Government does not accept the Commission’s analysis in the Apple State aid decision and have lodged an appeal with the European Courts. However, we have always been clear that we are fully committed to ensuring that recovery of the alleged Apple state aid takes place without delay and have committed significant resources to ensuring this is achieved.

ENDS

Contact:
Deborah Sweeney, Press Adviser to Minister Donohoe, +353 86 858 6878
Aidan Murphy, Press Officer, Department of Finance, +353 85 886 6667
pressoffice@finance.gov.ie

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The Cost of Insurance Working Group – chaired by the Minister of State for Financial Services and Insurance, Michael D’Arcy TD – has published its Fifth Progress Update.  This quarterly report is the first to provide details on the implementation of the Report on the Cost of Employer and Public Liability Insurance, which was released last January, as well as continuing to outline developments in respect of the Report on the Cost of Motor Insurance recommendations.  Both of the primary Reports and all five quarterly updates are available on the Department of Finance website.

In relation to the Liability Insurance Report, all eight actions scheduled for delivery in the first quarter of the year have been fully completed.  While it is appreciated that some of these are stepping stones to the implementation of broader policy initiatives, it is envisaged that further significant progress can be made over the next six months, with the vast majority of the total number of actions (26 out of 29) due for completion before the end of 2018.

Of the four actions in the Motor Report with a Q1 2018 deadline, one has been met in full and it is expected that at least two of the other three will be concluded during the second quarter.  The Action Plan Monitoring Dashboard for the Motor Report currently indicates that 40 of the 50 separate deadlines set thus far have been met.

Taking implementation of the action points from the two Reports into consideration, therefore, 48 of 58 separate deadlines overall have been met since January 2017.  Minister of State D’Arcy has stated that while he is looking for the rate of achieving such targets to be further improved upon, he wishes to acknowledge “the continued determination of the members of the Working Group to push for all of the proposed measures to be put in place in their entirety as soon as possible and believes that the pattern of decreasing average motor premiums can be sustained and translate to similar price movements across all classes of insurance.”

The Working Group and associated sub-groups have been continuing to meet regularly in order to ensure the focus remains fixed upon the timely implementation of all the recommendations of the Report on the Cost of Motor Insurance and the Report on the Cost of Employer and Public Liability Insurance.

 

ENDS

11 may, 2018

 

Further information from:

Aidan Murphy (Press Office) – pressoffice@finance.gov.ie

Background Note to Editors:

The Cost of Insurance Working Group was initially chaired by the Minister of State at the Department of Finance, Mr Eoghan Murphy T.D.  However, following his appointment as Minister for Housing, Planning and Local Government, he was replaced as Chair by Minister of State for Financial Services and Insurance, Mr Michael D’Arcy T.D. The Working Group is comprised of representatives from the Department of Finance, the Department of Business, Enterprise and Innovation, the Department of Justice and Equality, the Central Bank of Ireland, the State Claims Agency, and the Personal Injuries Assessment Board.

The Report on the Cost of Motor Insurance was published in January 2017 and made 33 recommendations with 71 associated actions to be carried out in an agreed timeframe.  The Report on the Cost of Employer and Public Liability Insurance was published in January 2018 and made 15 recommendations with 29 associated actions to be carried out in an agreed timeframe.

There is a commitment in both Reports that the Working Group will prepare quarterly updates on its progress. The first update was published in May 2017, the second in July 2017, the third in October 2017 and the fourth in January 2018 and all four provided details on how the implementation of the recommendations were progressing, with a particular focus on the action points which were due for completion during the respective quarters – 10 in the first quarter, 17 in the second quarter, five in the third quarter and 14 in the fourth.

This Fifth Progress Update is the first such quarterly report to encompass both the Motor and EL/PL Reports and provides details on how the implementation of the recommendations is progressing, with a particular focus on the 12 actions which were due for completion during Q1 from both Reports. 9 of the 12 actions have been completed.  This consists of one action point from the Motor Report and all 8 from the EL/PL Report.

The three action points which have not been achieved on time in Q1 2018 have, it is envisaged, been in effect merely pushed back one quarter.  One relates to the extension of the deadline at EU level for transposition of the Insurance Distribution Directive, another is due to the agreed amalgamation of two separate Personal Injuries Commission reports into a single report, while the final delayed action is due to the emergence of issues of a technical and data protection-related nature in the development of a register of personal injuries proceedings.

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Second Motor Insurance Key Information Report

Cost of Insurance Working Group

11 May 2018

Minister of State, with special responsibility for Financial Services and Insurance, Michael D’Arcy T.D., today published the second Motor Insurance Key Information Report of the Cost of Insurance Working Group (the Working Group).  The Report is the second in a series of reports designed to address Recommendation 12 of the Cost of Insurance Working Group, which aim to increase the level of transparency of the insurance sector in advance of the National Claims Information Database.  The Report follows up on the first report, published in July 2017.

This Report provides information on overall ultimate claims costs trends from 2011 to 2016 for the main insurance companies operating in the Irish motor insurance market, who are Insurance Ireland members.  It sets these out broken down into Third Party Injury ultimate claims costs and Non-Injury ultimate claims costs including claims cost arising from damage, fire and theft, as well as windscreen claims.  In addition, it provides details on earned premium income and exposure in the sector for the same years.

Some key findings in the Report include:

  • Total claims costs per policy, for all claims types, based on projected ultimate costs, increased by about 2.7% per year, or 14% over the period from 2011 to 2016. These costs include both the general and special damages elements of compensation as well as associated costs such as legal, medical and other fees.
  • Driving this increase is the ultimate costs associated with third party injury claims, which represent 77% of the proportion of total ultimate claim cost per policy in 2016, as increase from 68% in 2011.
  • At the same time, the proportion of total ultimate claim cost per policy arising from non-injury claims (except Windscreen claims) was 29% in 2011, falling to 21% in 2016. This is primarily as a result of a fall in the frequency of non-injury claims.
  • The data also suggests that frequency of third party injury claims in Ireland is lower than in the UK but that the costs associated with those claims, including compensation, legal and other costs, are significantly higher than the same costs in the UK.

Commenting on today’s publication Minister D’Arcy noted that,

This report continues the process to improve data transparency in the motor insurance sector, particularly with regard to identifying trends with regard to the costs and types of claims being made.  The information contained in this second report, comes from companies representing approximately 90% of the Irish motor insurance market over the period 2011 to 2016, and has never before been published in this way on an aggregate basis across the industry.  The series of reports being published by the Department in advance of the establishment of the National Claims Information Database, demonstrate the potential usefulness of the Database in the future.  I would like to thank the insurance industry for their willingness to engage constructively on this project and look forward to the next report later this year, as well as progress on the National Claims Information Database legislation.”

 

ENDS

Further information from:

Aidan Murphy (Press Office) – pressoffice@finance.gov.ie

 

Detailed Information for Editors

 Preparation of the Report

A Sub-group of the Working Group, chaired by the Department of Finance, was established in January 2017 to implement this and other recommendations to improve data transparency.  The Sub-group includes members from the Department, the Central Bank, the State Claims Agency, the Personal Injuries Assessment Board and the Central Statistics Office.

The Sub-group engaged extensively with Insurance Ireland who indicated that a number of the metrics identified in the Working Group’s Report were not available in a consistent fashion due to different definitions and different ways for reporting and recording data.  A data set was agreed and a data request was issued to Insurance Ireland in March 2017.

This request sought information in two tranches.  The first tranche was received on 13 June 2017 and resulted in the publication of the first Motor Insurance Key Information Report in July 2017.

In line with the complexity of the additional data being requested in the second tranche, it was agreed that industry would not provide this data until 29 September 2017.  Insurance Ireland engaged independent consultants Verisk to collect and compile the data in the case of this more complex data set.  On 18 December 2017, a return, in the form of a report by Verisk outlining certain data and conclusions, was submitted to the Department by Insurance Ireland.

The Department while accepting that the process to collate the data was rigorous, emphasises that any conclusions reached on the data are Verisk’s and have not been subject to any further actuarial analysis by it or the Central Bank.  This is because, from a practical and cost perspective, there was little to be gained in the subgroup’s view from procuring a further actuarial analysis to verify the return, as to do so was unlikely to result in a major difference in outcome due to the fairly detailed approach to the gathering of this data by Verisk.  However, some clarifications in relation to the data and conclusions arrived at were sought and received from Insurance Ireland and Verisk.

Content of the Report

The attached Report has been prepared by the Sub-group using the data provided by Verisk on behalf of Insurance Ireland.

The key difference from the first report is that the claim costs presented in this report are ultimate claim costs.  In that regard, detailed information is provided on:

  • the projected ultimate frequency (i.e. the number of claims per policy) and average cost per claim for:
    • Third Party Injury claims, split into those claims where the Incurred Cost was always less than or equal to €250,000, and claims where the Incurred Cost was ever greater than €250,000;
    • total Third Party Injury claims;
  • the projected ultimate frequency and average cost per claim for non-Injury claims, split into Third Party Damage, Own Damage (i.e. claims made by an insured party for accidental damage to their own vehicle), other property-related claims (such as Fire and Theft), and Windscreen claims; and
  • the projected ultimate claim cost per policy for each claim type.

The Report includes a Summary of Key Data at the outset and appendices at the end setting out some of the relevant data received, the market coverage of those surveyed, the data return rates and methodologies used.

  • Part 1 of the Report sets out general information on the motor insurance sector.
  • Part 2 provides information on overall ultimate claims costs trends.
  • Part 3 looks at Third Party Injury ultimate claims costs trends.
  • Part 4 looks at Non-Injury ultimate claims costs trends.
  • Part 5 provides details on earned premium and exposure.

The Report is neutral in its presentation of the statistics and does not seek to engage in extrapolation or speculation.

Conclusions of the Exercise

The Sub-group believes that this exercise continues to lay the groundwork for the effective establishment of the National Claims Information Database as it helps to get insurers into the right frame of mind in terms of preparation for this next step.  However, the significant scale of the exercise also demonstrates how complex this whole area is and reinforces the importance of having a National Claims Information Database type framework arrangement in place sooner rather than later.

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The Minister of State for Financial Services and Insurance, Michael D’Arcy TD has announced the commencement of a selection process to identify an international member for the International Financial Services 2020 Strategy’s Industry Advisory Committee. This is a voluntary position and is advertised on the Department website (details below) and on StateBoards.ie.

Commenting on the launch of the process, Minister of State D’Arcy said: ‘The role of the International Member of the Industry Advisory Committee have proved invaluable as a way to provide us with an international perspective on developments in the international financial services scene which helps us to ensure our offering for the sector remains competitive and responsive to the global environment’

‘Given the nature of the role we are looking for a person with significant experience in the international financial services sector with a broad knowledge of the global IFS industry’

The closing date for expressions of interest is 6pm on 25 May 2018 and applicants are invited to submit an Expression of Interest and CV to ifs2020@finance.gov.ie with the subject ‘International Member – Industry Advisory Committee’.

Applicants should demonstrate their suitability for the post in terms of the skills and experience necessary to effectively undertake the role of International Member to the Industry Advisory Committee.

Expressions of Interest

ENDS

9th May, 2018

Note to Editors:

More information on the Government’s International Financial Services Strategy is available here: http://www.finance.gov.ie/what-we-do/international-financial-services/

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The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, met with Klaus Regling, Managing Director of the European Stability Mechanism (ESM) today (Tuesday). The two discussed the successes of the Irish economy after the crisis, and the economic situation in the wider euro area. They agreed on the need to continue to strengthen the monetary union, and reviewed the possible development of the ESM in that context.

Speaking about the meeting, Minister Donohoe said: ‘The creation of the European Stability Mechanism (ESM) was one of the key euro area reforms after the crisis. It has quickly established itself as a very effective and important institution. Four of the five countries that received EFSF or ESM loans have now successfully ended their programmes, and have among the highest growth rates in the euro area’. 

Together with all other euro area Member States, Ireland is a member of the ESM. As part of the EU-IMF Programme of Financial Assistance, Ireland was also a beneficiary of its predecessor, the European Financial Stability Facility. Officials from the ESM therefore continue to visit Ireland on a twice-yearly basis, participating in Post-Programme surveillance reviews for the purpose of its Early Warning System. The next review will take place next week.

“Ireland has made a remarkable recovery since the crisis, and represents one of the clearest success cases of Europe’s strategy to fight the crisis,” said Mr Regling.

Mr Donohoe expressed Ireland’s appreciation for the support of the ESM in agreeing to Ireland’s early repayment in full of its outstanding IMF Programme loans and the bilateral loans to Sweden and Denmark. This was an important milestone for Ireland in its recovery, which continues at a robust pace.

It is essential that euro area Member States continue to explore how to make the economic and monetary union more effective. Part of the current discussions are focused on the future role and remit of the ESM. Discussions on the ESM lending toolkit, and on whether the ESM should play a greater role in programme design and monitoring in the future, are ongoing at both the technical and  political level. Ireland agrees that the ESM should be strengthened and is open to exploring options for its development into a European Monetary Fund (EMF). The potential role of the EMF of course requires careful consideration and deliberation.

“While discussions remain ongoing, it is clear that the ESM will continue to play a key role in safeguarding the financial stability of the euro area,” said Mr. Regling.

Notes to Editors

  • Klaus Regling is the Managing Director of the European Stability Mechanism (ESM)
  • The ESM was established in October 2012 as a successor to the EFSF (the European Financial Stability Facility) which was created as a temporary crisis mechanism in June 2010.
  • The ESM can provide financial support to Euro Area Member States where it is found to be indispensable to safeguard the financial stability of the Euro Area as a whole and of its Member States.
  • The ESM operates on a ‘cash for reform’ basis, similar to the International Monetary Fund, as it includes strict conditionality in its lending.
  • The lending toolkit of the ESM comprises direct loans to Member States, Precautionary Credit Lines, indirect and direct bank recapitalisation and bond market purchases. To date, the only instruments activated have been ESM loans and indirect back recapitalisation. The ESM has, to date, provided financial assistance to Cyprus, Greece and Spain (the assistance to Spain was used for the sole purpose of restructuring its banks). The EFSF has provided financial assistance to Ireland, Portugal and Greece.
  • The ESM implements an Early Warning System to detect loan repayment risks (preparing a quarterly payment overview for each beneficiary Member State)

Ends

8 May, 2018

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88% of impacted customer who have been identified have now received offers of redress and compensation

Remaining 12% expected to receive offers by end-June 2018

Rate rectification has now been completed in 98% of cases requiring it.

The Minister for Finance and Public Expenditure & Reform, Paschal Donohoe T.D., has today (Wednesday) welcomed the Central Bank’s latest progress report on the Tracker Mortgage Examination. This progress report is the eighth public update since the Central Bank initiated its industry-wide Tracker Examination in October 2015. 

Minister Donohoe said: ‘I am pleased to note that this update demonstrates the progress lenders have made in providing impacted customers who have been identified with adequate redress and compensation. As at end-March, approximately 37,100 customers have now been identified as having been impacted by the tracker failings of their lenders. This is an increase of 3,400 on last December’s figures and includes 7,100 impacted tracker borrowers who were identified prior to the commencement of the industry-wide examination’. 

“Significant progress has also been made in terms of redress and compensation. A total of €459 million has now been provided for customers identified up to the end-March. This includes €47 million paid in redress and compensation to customers identified outside of the industry-wide examination. Of the customers identified so far, 88% have now received offers of redress and compensation. The Central Bank expects the remaining 12% to have received offers by end-June 2018. It is also encouraging that 98% of those customers that were on the wrong rate have had the situation rectified and their appropriate rate restored.” 

While The Central Bank now believes that the vast majority of impacted customers have been identified, the Bank will continue to carry out its review and supervisory work, and it is expected that there will be some further increase in the number of impacted customers before the examination is concluded. 

The Central Bank has also commenced enforcement proceedings against all of the main lenders. During the course of its investigations the Bank will consider all possible angles, including potential individual culpability. 

Minister Donohoe concluded: ‘The progress shown in this update demonstrates that the Central Bank Tracker Examination is succeeding in restoring impacted tracker customers to their correct mortgage interest rate and in providing them with redress and compensation that reflects the level of detriment they have suffered. The Minister also believes that lenders’ behaviour has been completely unacceptable and that as the Central Bank has noted in its update, ‘the Examination has exposed a clear lack of consumer-centred culture in lenders’’. 

“I would like to thank the Central Bank for its work on the Examination and fully support it in its remaining endeavour to complete the Examination as quickly as possible. All impacted tracker customers must receive appropriate redress and compensation. I forward to receiving a final report from the Central Bank upon its completion of the Examination.” 

ENDS

25 April, 2018

 

Contact:

Deborah Sweeney, Press Adviser to Minister Donohoe – 086 858 6878

Aidan Murphy, Press Officer, Department of Finance – 085 886 6667

pressoffice@finance.gov.ie

 

 

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The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD,  has confirmed that the Escrow Framework Deed which sets out the detailed legal agreement regarding the recovery of the alleged State aid will be signed by the Minister and Apple today (Tuesday).

This is a significant milestone with regard to the commencement of the recovery of the alleged State aid, as the Escrow Framework Deed is the overarching agreement which will govern the collection and eventual payment of funds.

It follows on from the recent announcements that the Bank of New York Mellon, London Branch has been selected as preferred tenderer for the provision of escrow agency and custodian services and that Amundi, BlackRock Investment Management (UK) Limited and Goldman Sachs Asset Management International have been selected as preferred tenderers for the provision of investment management services.

The signing of the Escrow Framework Deed by both the Minister for Finance and Apple now allows for the appointment of the Escrow Agent / Custodian and the Investment Managers. This in turn activates the process for the collection of the alleged State aid. It allows for the opening of the formal accounts into which the funds will be paid and ensures the timeline for the flow of funds in Q2 and Q3 of 2018 will be adhered to.

It is anticipated that the funds will flow into the Escrow Fund in significant tranches. It is expected that the full recovery will be effected by the end of Q3 2018. 

Speaking today Minister Donohoe said: “The Government fundamentally disagrees with the ruling of the Commission. However, as committed members of the European Union, Ireland is intent on complying with our binding legal obligations in this regard. This is the largest recovery fund of its kind ever to be established and due to the complexity of such, together with our duty to comply with EU procurement rules, it has taken some time to get to this point. I am happy that I can sign the deed with Apple today, which has been the subject of difficult and intensive work. Once the infrastructure associated with the escrow is put in place, following the execution of the deed, I expect that recovery of the funds will be completed by end Q3 2018.”

ENDS

Tuesday 24th April 2018

 

Contact:

Deborah Sweeney, Press Adviser to Minister Donohoe, +353 86 858 6878

Aidan Murphy, Press Officer, Department of Finance, +353 85 886 6667

pressoffice@finance.gov.ie

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Government policy on banking remuneration has remained unchanged since the financial crisis. Extensive restrictions are in place, which, in summary, limit total remuneration for staff in AIB, Bank of Ireland and PTSB to €500,000 (excluding a standard pension contribution). Policy also dictates that bonuses and many other benefits cannot be paid to any staff*.

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe, has today (Thursday) outlined his commitment to making no change in policy in this area at this stage and reiterates that all remuneration restrictions remain in place. Arising from this, the Minister will abstain from voting on the remuneration resolution being put to the AGM of Bank of Ireland tomorrow (Friday).

In relation to the relevant resolution being put to the AIB AGM next week, as this puts a formal executive share scheme before shareholders for their approval, the Minister intends to vote against this resolution.

In light of changes in the economy and the potential impact of Brexit on the financial sector, it is Minister Donohoe’s intention to carry out a review of banking remuneration policy. This will be done through the procurement of an external consultant to advise the Minister on whether or not policy in this area remains fit for purpose and to advise on how it might be developed in the future.

Commenting on his intention to vote against the AIB resolution next week and to carry out a review of banking remuneration policy, Minister Donohoe said: ‘I recognise the Chairman and Board’s right to put this resolution to all the shareholders of AIB, given their concerns about management retention and incentivisation in what is an increasingly competitive employment market. However I cannot vote in favour of the resolution being put forward next week’.

“Policy in this area must be set by Government. So, what I can commit to today is that my Department will tender for a consultant to examine whether our remuneration policy remains fit for purpose, identify its impacts and update me on how this policy compares in a wider European context. These remuneration restrictions date back nearly a decade and affect in the region of 23,000 Irish bank staff. I acknowledge also that in light of Brexit, policy of this nature could act as a barrier to the retention of staff in some areas in what will become an increasingly competitive market due to the fact that new market entrants will not be subject to this policy consideration.” 

Finally, for the avoidance of doubt the Minister notes that the power to alter the so-called ‘super tax’ of 89% on banking bonuses[1]contained in the Finance Act of 2011 remains with Dáil Éireann.

ENDS

Thursday, 19 April 2018

 

Contact:

Deborah Sweeney, Press Adviser to Minister Donohoe – 086 858 6878

Aidan Murphy, Press Officer, Department of Finance – 085 886 6667

Press Office pressoffice@finance.gov.ie – 01 676 0336

 

Notes to editors:

*A summary of banking remuneration restrictions:

  • A total remuneration cap of €500,000, excluding a standard pension allowance
  • No bonuses
  • No new fringe benefits
  • No cash allowances or pension top ups
  • No new commission or incentive schemes
  • No contractual arrangements with executives or directors on termination that provide compensation
  • Restrictions around contractual payments to employees on termination that provide compensation
  • Restrictions on fees payable to non-executive directors

[1] The bonus tax would apply to any remuneration which is variable or not regular salary including an award in shares

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The Minister for Finance and for Public Expenditure and Reform, Paschal Donohoe T.D., today (Tuesday) published the Government’s Stability Programme Update 2018 (SPU).  The Stability Programme sets outs the Government’s updated macroeconomic and fiscal forecasts for the period 2018-2021.  The macroeconomic forecasts underpinning the SPU were endorsed by the Irish Fiscal Advisory Council on 10th April.

Minister Donohoe will present the draft Stability Programme Update to the Oireachtas Budget Oversight Committee on Wednesday, 18th April 2018.  The finalised document will be submitted to both the European Commission and the European Council on 30th April 2018, in line with legal deadline.

The SPU sets out:

  • Growth forecast for 2018 revised up to 5.6 per cent and up to 4.0 per cent for next year.
  • The labour market will continue to benefit from strong growth in domestic demand, with employment growth of 2.7 per cent forecast for this year.
  • On this basis, there will be more people at work in Ireland by the end of this year than ever before.
  • Unemployment is projected to average 5.8 per cent this year and 5.3 per cent next year.
  • A general government deficit of 0.2 per cent of GDP is projected for this year, unchanged from the Budget-day forecast.  For next year the deficit is projected at 0.1 per cent of GDP.
  • This takes account of additional spending amounting to €2.6 billion, of which almost €1.5 billion relates to capital spending increases set out in the National Development Plan. This includes €0.4 billion for Housing, Planning and Local Government, €0.3 billion for Transport, Tourism and Sport, €0.2 billion for Health, and €0.2 billion for Education. This investment will ensure a sustained increase in social housing delivery, new transport infrastructure and maintenance, along with the prioritisation of additional school infrastructure and the delivery of the National Children’s Hospital.  
  • Our debt position continues to improve, with our general government debt-to-GDP ratio falling to 68 per cent last year and set to decline to 66 per cent this year.  However, the ratio of debt-to-GNI* is projected at 97 per cent for this year.

Commenting on the Stability Programme Update, the Minister for Finance said: ‘The short-term outlook for our economy, as set out in the SPU, is positive and this is delivering gains where it really matters – in the labour market.  In the first half of this year, the level of employment will rise above its pre-crisis peak, a sure sign of the distance we have travelled. Our hard-won gains cannot be taken for granted though. Geopolitical factors that have the potential to negatively impact growth; disruption to world trade and the effect that could have on the global economy; policy uncertainty in the US and, of course, Brexit, all have the potential to damage future economic conditions.  It is imperative, therefore, that we continue to prudently manage the economy and the public finances in an increasingly uncertain world.  We will continue to do this through the implementation of sensible policies that will ensure that growth is maintained at sustainable levels and that our improved economic performance translates to a better quality standard of living for all of our people.”

 

Stability Programme Update 2018

Presentation by Chief Economist John McCarthy on SPU 2018 

SPU Chartpack 2018

 

ENDS

Tuesday, 17th April 2018

 

Contact:

Deborah Sweeney, Press Adviser to Minister Donohoe – 086 858 6878

Aidan Murphy, Press Officer, Department of Finance – 085 886 6667

Press Office pressoffice@finance.gov.ie – 01 676 0336

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The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, is in Berlin today (Thursday) for a programme that includes a number of high level political meetings. 

Minister Donohoe will meet with his new German counterpart, Vice-Chancellor and Finance Minister Olaf Scholz, as well as with Minister for Economic Affairs, Peter Altmaier, for discussions on a range of issues on the EU agenda.

In addition, the Minister will speak at a roundtable event with representatives of German industry and leading think-tanks. He will also undertake a number of media engagements.   

Speaking about his visit, Minister Donohoe said: ‘My visit to Berlin is an important bilateral engagement with key Ministers in the new German Government.  I know Minister Altmaier from his recent time as Germany’s interim Finance Minister and look forward to our discussions on Brexit and on areas of mutual interest arising on the current EU agenda’.

“I also look forward to engaging with my new counterpart, Minister Scholz, on a range of issues, particularly the ongoing work we are undertaking to prepare for Brexit and the future of our Economic and Monetary Union (EMU).”

ENDS

Thursday, 12th April 2018

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  • Today’s Exchequer Returns show that for the first quarter of 2018 the Exchequer recorded a deficit of €1,114 million which is €211 million higher when compared to the same period in 2017.
  • Taxes received in the first quarter of 2018 are up 3.5% or €400 million in annual terms.   
  • Gross voted expenditure on public services and infrastructure is down 2.3% on profile but up 3.7% year-on-year.

Speaking about the Exchequer figures today, the Minister for Finance and Public Expenditure & Reform, Paschal Donohoe T.D. stated: ‘Today’s Exchequer figures illustrate solid growth in tax revenues, which in turn is underpinned by an improving economy. These provide the resources to fund our public services and the investment to enhance our growth potential and address key infrastructural bottlenecks, with gross expenditure for the quarter up 3.7% year-on-year’  

“These first quarter figures represents a good start to the year and provide a platform to help achieve our annual targets. However, potential challenges, including Brexit, exist, making it even more important that the Government continues its careful stewardship of the public finances. We will continue to focus on prudent management of the economy and on implementing competitiveness-oriented policies to ensure we remain resilient in the years ahead.”

Fiscal Monitor – March 2018

End-March 2018 Exchequer Returns Presentation

 

ENDS

Wednesday, 4th April 2018

 

Contact:

Deborah Sweeney – Press Adviser to Minister Donohoe – 086 858 6878

Press Office pressoffice@finance.gov.ie 01 676 0336

Bhí an tír seo rannpháirteach i ndíospóireacht fhorleathan agus thairbheach leis an gCoimisiún Eorpach lena chinntiú ó chuirfear tús le Cáin ar Dheochanna Siúcra-Mhilsithe nach sárófar dlí an AE maidir le státchabhair.

Tar éis na díospóireachta tairbhí seo leis an Aontas Eorpach agus tar éis fógra foirmiúil a thabhairt dó, táthar ag súil le cinneadh dearfach sna seachtainí atá amach romhainn maidir le cead a fháil an cháin a chur i bhfeidhm.

Cuirfear an cháin i bhfeidhm ar dheochanna siúcra-mhilsithe anois an 1 Bealtaine 2018 agus ní an 6 Aibreán 2018 mar a bhí beartaithe ar mhaithe le deis a thabhairt leis na próisis riaracháin atá riachtanach maidir le Státchabhair a cheadú a thabhairt chun críche. Tá an cháin ar dheochanna siúcra-mhilsithe ar an gcéad cheann dá leithéid a bhfuil athbhreithniú déanta ag an gCoimisiún Eorpach air agus cuirfidh sé binsemharc ar fáil maidir le cinntí ó thaobh Státchabhair sa réimse seo. Tá na príomhgheallsealbhóirí curtha ar an eolas maidir leis an bhforbairt seo.

Cáin í an cháin ar dheochanna siúcra-mhilsithe chun cuidiú le dul i ngleic le leibhéil murtaill atá ag dul i méid. Mhol an Eagraíocht Dhomhanda Sláinte teorannú a dhéanamh ar úsáid deochanna siúcra-mhilsithe mar chuid den straitéis chun dul i ngleic le murtall. Tá an cháin seo ar cheann de shraith beartas atá á gcur i bhfeidhm mar chuid den chreat beartais uileghabhálach le haghaidh a thabhairt ar an tsaincheist seo. Táthar ag súil go dtiocfaidh laghdú ar an méid de na deochanna seo a óltar mar thoradh ar an mbac airgeadais ar dheochanna siúcra-mhilsithe trí dhaoine aonair a spreagadh le deochanna atá níos folláine a roghnú chomh maith leis an tionscal deochanna boga a spreagadh chun dul i mbun beart agus an méid siúcra atá á chur le deochanna a laghdú agus táirgí atá níos folláine a chur ar fáil.

Críoch

Déardaoin, 29 Márta 2018

 

Teagmháil:

Aidan Murphy – Preasoifigeach, An Roinn Airgeadais – 085 886 6667

pressoffice@finance.gov.ie

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The Department of Finance has today published a new economic research paper, Brexit: Analysis of Import Exposures in an EU Context.

The paper examines the sectoral import exposures of the Irish economy and other EU Member States to the UK, building on a September 2017 Department of Finance research paper analysing export exposures. Together with previous studies, this report is a further contribution that will inform the whole of Government work on contingency planning. 

The paper’s key findings include:

  • Ireland is a substantial outlier amongst the EU-27 in terms of its import exposure to the UK, at an aggregate level, and in almost every sector. Ireland’s goods import exposures to the UK are even more pronounced than its export exposures.
  • Food and live animals account for Ireland’s largest share of UK imports, with machinery and transport equipment, chemicals, manufactured goods, miscellaneous manufacturing articles and mineral fuels all also significantly exposed. This compares with the concentration of export exposures in a smaller number of sectors, in particular food and live animals and chemicals.
  • Across the EU-27, thirteen of the top fifteen subsectors* most exposed to imports from the UK are Irish.
  • The high import exposures highlight the potential disruption to Irish supply chains, particularly for the retail, agri-food and pharma-chem sectors.
  • Regarding services, Ireland is considerably less exposed to the UK with regard to imports than exports, at both an aggregate and sectoral level.

Commenting on the publication of the research, Minister for Finance and Public Expenditure and Reform, Paschal Donohoe T.D., stated: ‘My Department has today published its latest Brexit research.  This paper is the most recent economic assessment produced by my Department on Brexit and examines an area that has, until now, received less discussion, namely the impact of Brexit on imports’.

“Understanding all of the transmission channels of the impact Brexit will have on the economy is important to develop the appropriate policy response. The results highlight the need for us to continue take steps to prepare our economy for Brexit. We have been consistent in our position that it is in Ireland’s interest that, post-Brexit, there is the closest possible relationship between the EU and the UK, including on trade. This is in line with the March European Council Guidelines, which reaffirmed the EU’s desire to establish a close partnership with the UK. 

“We continue to work closely with the Commission Task Force and our EU partners to progress the negotiations.”

* Goods are divided into ten sectors, as per the Standard International Trade Classification, e.g. Food and Live Animals. Subsector refers to the next level of product disaggregation within these sectors. The top five subsectors are all Irish and comprise gas, live animals, dairy products and birds’ eggs, cereals, and essential oils and perfume materials.

 

ENDS

Contact:

Aidan Murphy – Press Officer, Department of Finance – +353 (0) 85 886 6667

pressoffice@finance.gov.ie

 

Notes to Editors

Further Detail:

  • €17bn (23 percent) of Irish goods imports came from the UK in 2016, compared with €15bn (13 percent) of goods exports going to the UK.
  • Ireland is a significant outlier amongst the remaining EU-27 in terms of how exposed its imports are to the UK. Cyprus is the next most exposed Member State with just 6 percent of imports from the UK.
  • On the exports side, Ireland is still the most exposed Member State, with the UK accounting for 13 percent of total goods exports, but a number of other Member States export 8-10 percent of their goods to the UK (e.g. Netherlands, Belgium).
  • On a sector-by-sector basis, Ireland is an outlier across the EU-27 in almost every import sector.
  • The Food and Live Animals sector has the highest level of UK goods imports, importing €3.2bn from the UK in 2016. This represents almost 5 percent of total Irish goods imports from the UK and almost 50 percent of total Food and Live Animals imports.
  • In the Chemicals sector, which includes pharmaceuticals, 16 percent of imports came from the UK (€2.5bn). This is a highly regulated sector and as such could be impacted by any divergence in regulation and standards in the industry post-Brexit, in addition to any disruption to supply chains.
  • Out of Ireland’s €8.2bn imports of “Miscellaneous Manufactured Articles”, which is comprised primarily of final consumption goods, 28 percent come from the UK. This reflects the retail distribution of large foreign-owned retailers, which is centralised in the UK. Brexit could significantly affect this supply chain and thus impact Irish consumers through higher importation costs associated with alternative (and more costly) distribution channels.
  • Other sectors with high levels of imports from the UK are Machinery and Transport Equipment (€3.1bn), Manufactured Goods (comprised primarily of intermediate goods for production; €1.9bn), and Mineral Fuels (€2.1bn).
  • Northern Ireland accounts for a small proportion of imports within each sector – the largest being Food and Live Animals, where NI accounts for €453m, or 14 percent of that sector’s UK imports.
  • Ireland is considerably less exposed to the UK with regard to services imports than exports, with 6 percent of services imports coming from the UK, compared with 16 percent of services exports going to the UK. While Ireland is the second most exposed Member State for services exports, it is one of the least exposed for services imports across the majority of services sectors.

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The Minister of Finance and Public Expenditure & Reform, Paschal Donohoe T.D. has announced the commencement of a competitive, publically advertised selection process to identify an Irish nominee as Director of the London-based European Bank for Reconstruction and Development (EBRD). This full-time, residential position for a term of three years is advertised on the Department of Finance website (details below) and on PublicJobs.ie.

Commenting on the launch of the process today, Minister Donohoe said: ‘The person appointed as Director will be a significant additional resource for Ireland and a source of informal influence on Ireland’s behalf at the EBRD. The individual will also, by virtue of the post, be in a position to directly shape the EBRD’s investment policies and strategies in the coming years’.

“Given the nature of the post, the Irish Director must have the necessary skills and experience to operate effectively at a very senior level at the Bank and work closely with other international institutions and governments of member countries. The Directors have also to work with the business sector, including finance and industry.

“This Government is committed to open and transparent recruitment and it is therefore most appropriate that we are using a publicly open recruitment process in selecting a nominee and I look forward to reviewing the applications that come from this process.”

Once selected by Government, the proposed nominee will then have to secure the approval of Ireland’s Constituency colleagues (Denmark, Lithuania and Kosovo) followed by the Bank’s Board of Governors representing each Government and shareholder.

The closing date for expressions of interest is 5pm on 17 April and applicants are invited to submit an Expression of Interest and CV to recruitment@finance.gov.ie with the subject EBRD – Director. This should demonstrate their suitability for the post in terms of the skills and experience necessary to effectively undertake the role and responsibilities of Ireland’s EBRD Director.

 

Advertisement – Director at the European Bank for Reconstruction and Development (EBRD)

Personal Requirements for the Post of Director at the European Bank of Reconstruction and Development (EBRD)

EBRD Director – Roles and Responsibilities

 

ENDS

Tuesday, 27 March 2018

 

Contact:

Deborah Sweeney – Press Adviser to Minister Donohoe – 086 858 6878

Aidan Murphy – Press Officer, Department of Finance – 085 886 6667

pressoffice@finance.gov.ie

 

Notes to Editors:

Ireland is a founding member of the European Bank for Reconstruction and Development (EBRD); a development investment bank located in London. It is owned by 66 countries, the European Union and the European Investment Bank. Each shareholder is represented individually on the Board of Governors (by Ministers of Finance) of the EBRD which has the overall authority over the Bank. The Board of Governors delegates most powers to the Board of Directors, which is responsible for the EBRD’s strategic direction.

Tar éis próiseas tairisceana iomaíoch, tá an Roinn Airgeadais in ann a dheimhniú go bhfuil Amundi, BlackRock Investment Management (UK) Limited agus Goldman Sachs Asset Management International roghnaithe mar thairgeoirí roghnaithe le seirbhísí bainistíochta infheistíochta a sholáthar i ndáil le próiseas aisghabhála Státchabhair líomhnaithe Apple.

Beidh Gníomhaireacht Bainistíochta an Chisteáin Náisiúnta (NTMA), atá i mbun stiúrtha ar an bpróiseas soláthair thar ceann an Aire Airgeadais, Paschal Donohoe TD, agus Apple ag obair leis na tairgeoirí roghnaithe le conarthaí a thabhairt chun críche sna seachtainí atá romhainn.

Mar a fógraíodh roimhe seo, roghnaíodh an Bank of New York Mellon le déanaí mar thairgeoir roghnaithe do sheirbhísí taisceánaigh agus eascró maidir le próiseas aisghabhála Státchabhair líomhnaithe Apple.

Rinne an NTMA, thar ceann an Aire Airgeadais, Paschal Donohoe TD, stiúradh ar an bpróiseas soláthair do sheirbhísí taisceánaigh agus eascró chomh maith le seirbhísí bainistíochta infheistíochta a chur ar fáil i gcomhar le Apple.

Cuirfear tuilleadh eolais ar fáil in am trátha.

Críoch

An Aoine, 23 Márta 2018

 

Teagmháil:

Deborah Sweeney – Comhairleoir Preasa don Aire Donohoe – +353 86 858 6878

Aidan Murphy – Preasoifigeach, An Roinn Airgeadais – +353 85 886 6667

pressoffice@finance.gov.ie

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Minister Donohoe publishes discussion paper on virtual currencies and blockchain technology

Working Group to monitor cryptocurrency developments established within Department of Finance

The Minister for Finance and Public Expenditure & Reform, Paschal Donohoe T.D today (Thursday) published a discussion paper prepared by his Department on virtual currencies and blockchain technology, and announced the subsequent creation of an internal working group to monitor further developments in this area.

This follows the Department’s active research into virtual currencies and the blockchain ecosystem that exists in Ireland, Europe and globally. The discussion paper comprises an overview of virtual currencies and the blockchain technology supporting them; summarises actions taken by selected countries around the world; and sets out the key risks and opportunities these technologies present.

The discussion paper concludes with a recommendation to establish an internal working group to coordinate the Department’s engagement in this area, both locally and abroad.

Minister Donohoe commented: ‘Consumers and investors should be aware that buying and exchanging virtual currencies comes with considerable risks. Virtual currencies remain an unregulated activity, and the prices at which they are traded remain highly volatile’.

“However, while investing in virtual currencies may involve risks, the blockchain technology that underpins them has the potential to be a catalyst for innovation in the financial services sector and elsewhere. One of Ireland’s strengths is its ability to innovate and adapt to emerging trends across finance and technology and I have spoken before about the importance of developing clusters in key growth areas as a way of nurturing Ireland’s knowledge economy.

“The Government’s IFS2020 vision is to be recognised as a global location of choice for specialist international financial services by building on our strengths in talent, technology, innovation and excellent client services, while focussing on capturing new opportunities in a changing marketplace and embracing the highest standards of governance. By engaging with virtual currencies and blockchain technology, Ireland, through the work undertaken by the Department of Finance, can be instrumental in creating a predictable and open blockchain ecosystem in Ireland and furthering that ambition.”

Ends

 

Contact:

Deborah Sweeney – Press Adviser to Minister Donohoe – +353 86 858 6878

Aidan Murphy – Press Officer, Department of Finance – +353 85 886 6667

pressoffice@finance.gov.ie

 

Note to editors:

Previously, the Central Bank of Ireland issued alerts on Initial Coins Offerings, echoing the warnings published by the European Securities and Markets Authority (ESMA) in November of 2017 [Link] and the European Bank authority (EBA) in December 2013 [Link]. Most recently, in February of this year, the Central Bank of Ireland issued warnings to consumers and investors regarding the risks of investing in virtual currencies [Link].

D’fhoilsigh an Coimisiún Eorpach moltaí ar maidin (Dé Céadaoin) maidir le dhá Threoir a bheidh dírithe ar aghaidh a thabhairt ar an tsaincheist a bhaineann leis an mbealach a ndéantar cáin a ghearradh ar chuideachtaí digiteacha san Aontas Eorpach. Tá obair fhorleathan ar bun ag leibhéal idirnáisiúnta tríd an OECD ar an ábhar cáin a ghearradh ar ghníomhaíochtaí digiteacha agus sin á dhéanamh mar chuid den phróiseas Creimeadh an Bhoinn agus Aistriú Brabúis (BEPS). De réir na tuarascála is déanaí ón OECD maidir leis na dúshláin chánacha a bhaineann le digitiú níltear ar aon go hidirnáisiúnta fós maidir leis an mbealach is fearr le haghaidh a thabhairt ar an tsaincheist seo.
Ag tagairt do na moltaí, dúirt an tAire Airgeadais agus Caiteachais Phoiblí agus Athchóirithe, Paschal Donohoe: ‘Tugaim moltaí an Choimisiúin a foilsíodh inniu ar aird agus creidim gur chóir féachaint air seo i gcomhthéacs thuarascáil na seachtaine seo caite ón OECD. Mar is gnách, oibreoidh Éire le Ballstáit eile le measúnú criticiúil a dhéanamh ar na moltaí ón gCoimisiún. Níltear ach i dtús próisis a rachaidh ar aghaidh ar feadh tamall fada agus go comhthreomhar le hobair an OECD. Is díol suntais é gur tugadh ar aird i dtuarascáil an OECD nach bhfuil tíortha ar aon intinn ar an ábhar seo.’
Críoch

Teagmháil:
Deborah Sweeney – Comhairleoir Preasa don Aire Donohoe – +353 86 858 6878
Aidan Murphy – Preasoifigeach, An Roinn Airgeadais – +353 85 886 6667
pressoffice@finance.gov.ie


Aníos go Barr