By Harry Keaney
Directors of the International Monetary Fund, who visited Ireland earlier this year collecting economic and financial data, have warned that if the global economic downturn continues, it will have "a significant adverse effect" on Ireland’s open economy.
According to an IMF report, some of the directors stressed that more needs to be done to strengthen the supervision of financial intermediaries and cool off the housing market, where prices had escalated due to "the rapid growth of credit."
The IMF warned the government that major tax concessions in the budget could fuel inflation. Most of its directors believed that room for further concessions was limited in the short term, "unless there was firm evidence that excess demand had been eliminated."
The IMF estimated a gross domestic product growth rate for Ireland in 1998 of 8.3 percent, broadly in line with the department of Finance’s 8.7 percent estimate but well below the European Commission’s prediction of 11.4.
The IMF states that what cuts there are "should be directed to strengthening work incentives for the low paid in order to help ease labor shortages and improve prospects for wage restraint."
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IMF directors also warn of the long-term pressure on public finances as Ireland’s population ages.
"Europe, currency and the Union"
Francis O’Rourke, counselor at law, and John Hegarty, CPA, will be guest speakers on the subject of "Europe, the Currency and the Union" during an Irish Networking Society meeting on Nov. 4 at 6:30 p.m. in The Independence Room, the John Hancock Hall, 180 Berkeley Street, Boston. Admission $5 for members and $10 for non-members. Tea and coffee will be served. For information, call (781) 446-8074 or http:/www.celticweb.com/ins.
The government is considering proposals to introduce radical taxes and levies on banks and financial institutions in a move to recoup monies lost when corporation tax rates are reduced. The measures being examined include stamp duties on financial products and insurance levies. Officials are believed to be concerned that any new taxes be levied on the banks, rather than their customers, but how this can be implemented in practice remains to be seen.
Last July, it was announced that, under an agreement with the European Commission, Irish corporation tax was to be reduced from 32 percent to 12.5 by 2003. As part of the agreement, a preferential corporation tax regime of 10 percent would continue until 2005 for International Financial Services Center or Shannon Customs Free Zone companies and 2010 for manufacturing exporters.
Graduate recruitment in Ireland is "a totally different ballgame" now than it was just a few years ago, according to the human resources manager of a leading software firm. "It’s the companies, not the graduates, who have to sell themselves now," according to Clare Buckley, human resource manager at Sun Microsystems.
Six partners in Jones Lang Wootton, one of Dublin’s leading commercial property agencies, will become paper millionaires, if, as expected, Jones Lang Wootton merges with LaSalle Partners, one of the biggest property companies in the U.S., according to the Irish Times. The enlarged group will be the biggest of its kind in the world. Jones Lang Wootton’s Dublin office operates one of the most profitable commercial property agencies in Ireland. The six partners are Alan Bradley, Pat McCaffrey, John Mulcahy, William Tuite, Anthony O’Loughlin and Stephen Murray.