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Business Briefs As good times roll, Irish spend freely

February 16, 2011

By Staff Reporter

By Harry Keaney

The Irish are spending like never before, with unprecedented amounts being shelled out for food, alcoholic drinks, tobacco, foreign holidays, recreational pursuits, entertainment, education, cars, clothing, footwear, housing, fuel and power.

According to figures from the Central Statistics Office, the breakdown of expenditure of personal income shows that Ireland is now almost doubling its spending on alcoholic drink since 1990, with £3.5 billion going on drink and a further £1.2 billion on tobacco.

One of the biggest increases in spending has been on foreign holidays, going from £537 million in 1990 to £1.5 billion last year.

As a nation, the Republic’s total personal expenditure rose by £23 billion between 1990 and 1999. Of course, all this expenditure also has meant a massive windfall in tax receipts for the government.

Meanwhile, it seems that the Irish, already among the heaviest personal borrowers in Europe, will be getting even more opportunities to obtain credit. Up to 30 European banks intend to start operations in Ireland, leading to fears that the credit boom could go out of control.

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Among those concerned is Irish central bank governor Maurice O’Connell. The Irish central bank, once similar to the Federal Reserve in the U.S., no longer has the power to determine Irish interest rates; that task is now undertaken on a Eurowide basis by the European Central Bank in Frankfurt.

O’Connell told a government committee on European affairs last week that the days of controlling credit by dictating to the banks how much they can lend are over.

"There is no authority to impose restrictions as we might wish," he said.

Credit is now growing at 25 percent a year and it is one of the factors driving up property prices at what O’Connell described as "alarming rates."

New stock market?

The Irish stock exchange is planning to launch a market for technology companies next month, according to news reports in Ireland.

Known as "iteq," the new market will aim to attract technology firms to list in Dublin. The rules for the new market are expected to mirror those for listing on the technology-laden Nasdaq in the U.S.

Crossing the Shannon

A new £3.5 million car ferry crossing the Shannon estuary, linking Killimer, Co. Clare, and Tarbert, Co. Kerry, has been launched. The new vessel, Shannon Breeze, is now one of three ferries on the estuary owned by the Shannon Ferries Company, which has maintained the link across the Shannon since 1968.

Eircom plays ball

Shares in Eircom, the Irish telecommunications company, may not have been the best buy, but Irish soccer fans are sure to be seeing a lot of the Eircom logo in the future. That’s because Eircom is to become sponsor to the Irish international soccer team, replacing Opel for the Republic’s first World Cup preliminary match against Holland in Amsterdam on Sept. 2.

Opel had been sponsor since 1986 and benefited from the massive exposure as a result of the team’s successes during team manager Jack Charlton’s reign.

Another Northern link

Northern Ireland’s ongoing political and economic transition has a new advocate, the American Business Council, which recently held its first meeting in Belfast. Formed under the auspices of the Northern Ireland Chamber of Commerce and Industry, the new council will help encourage more American investment in Northern Ireland.

The honorary chairman of the American Business Council is U.S. Consul General Ki Fort. It’s executive committee includes officers of some top American companies such as Ford, Caterpillar and Du Pont.

More than 100 U.S. companies employing more than 17,000 people have operations in Northern Ireland.

Internet travel winner

1 2 Travel, an internet travel company founded by three young Irish entrepreneurs who each completed an MBA in St. Joseph’s University in Philadelphia and returned to Ireland in 1998, has won the West Cork Enterprise Awards. The company now goes forward to Ireland’s National Enterprise Awards 2000. The awards are sponsored by Bank of Ireland and the Sunday Business Post newspaper.

1 2 Travel offers flights, accommodation and activity vacations on the internet. The three men who started the company are Conor B. Buckley, who is managing director; Cormac O’Neill and Conor Buckley.

Because of the high cost of renting space in urban areas, they based their business in a converted outhouse on a family farm near Castletownshend, in West Cork. Their company currently employs more than 30 people. At present, it has three internet sites targeting the U.S., the UK and Irish markets. The company is developing German, French and Canadian sites. It has achieved more than £1 million in online sales for the first six months of this year alone.

About 80 percent of the company’s sales comes from its U.S. website which is at www.12travel.com.

Most of the company’s U.S. customers are from New York, New Jersey, Boston, Chicago, Baltimore, Washington, Texas, California, Minneapolis and surrounding areas. Coach tours are very popular as are requests for accommodation in Irish castles.

Tinkering with the figures

People in Ireland’s software industry are worried about new accounting proposals in Britain. The Irish Software Association has warned that publicly quoted Irish high-tech companies could be at a disadvantage to their U.S. rivals if new rules on accounting of share options comes into force.

Under the new rules, companies would have to charge the cost of share-option plans against the profit-and-loss account, a move that could put a dent in future profits and lessen the attractiveness of Irish high-tech companies to U.S. investors.

The UK Accounting Standards Board hopes the new rules will be introduced within two years. There are fears that any change in British accounting rules could be reflected in Ireland.

Casino wins

With reports that a casino might sometime be on the way for Greene County in New York’s Catskills, some of the local people around the Town of Catskill and East Durham, for example, may eventually find themselves perusing figures from other casinos.

In June, Foxwoods Resort Casino, in Mashantucket, Conn., made $59.1 million from its slot machines, similar to revenues from a year ago, according to the Mashantucket Pequot Indians. During the month, Foxwoods gamblers had a choice of 5,848 slot machines at the casino, with each machine making an average of $337 for the casino each day.

The coffers of Connecticut state benefited too. Foxwoods made a payment of $14.7 million to the state under the Mashantucket Pequot tribe’s gambling compact.

Remembering a union man

A New York labor union has taken the unusual step of having a 10,000 copies of a special 12-page tribute published in commemoration of a clergyman. But then, the clergyman is the late Cardinal John O’Connor, a strong supporter of labor. The tribute has been published by 1199/SEIU, New York’s Health and Human Services Union.

O’Connor, who died in May, often pointed out that his father, a Philadelphia craftsman skilled in goldleafing, was a union man.

Whether O’Connor’s successor, Archbishop Edward Egan, from the Diocese of Bridgeport, Conn., becomes as friendly as O’Connor was to the labor movement in New York remains to be seen.

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