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Irish debt will be close to quarter of trillion by year end, Donohoe warns

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Irish government debt will stand at close to a quarter of a trillion euro by the end of the year, Minister for Finance Paschal Donohoe has said.

Addressing the national economic dialogue – which involves senior Government figures, employers, trade unions and social campaign groups – he said the Government needed to end its expansionary budgetary policy as the economy emerged from the pandemic.

Separately, Taoiseach Micheál Martin told the same event State expenditure over the last year or so on foot of the pandemic – of about €38 billion – was “not sustainable”.

Mr Martin said “we must now move to the next phase, in which the finite resources that Government can deploy are targeted at those who need them most, and used in a way that best supports recovery and our future prosperity”.

“While we will be ambitious in our plans and in what we want to achieve, we must be mature enough as a society to recognise that there are trade-offs, that not everything can be achieved overnight, and that for so many of the challenges we face there are no easy, quick answers or solutions.”

Minister for Public Expenditure Michael McGrath said “the bottom line is we must manage our finances sensibly as we emerge from Covid to avoid major problems down the line”.

“Failure to unwind Covid spending once Covid is behind us means this has to be funded by higher taxes or by running larger deficits for longer, with the associated risks this brings for our finances once the European Central Bank’s intervention in the markets tapers off and the fiscal rules are fully reinstated.”

The Taoiseach said the Government’s Summer Economic Statement would plot how to achieve a “broadly balanced budget as employment recovers”.

“This will mean making choices around how and what we deliver, choosing what we focus upon, ensuring we are taking a sustainable and responsible approach to our public finances – so that we will again have the space to respond should challenges strike again, as they surely will – and managing within the real constraints we face.”

Mr Donohoe said the macroeconomic context against which the forthcoming budget would be framed was one “in which economic recovery [in Ireland] is gaining significant momentum”.

He said it was important fiscal policy evolved to reflect changing circumstances. “Put simply, we cannot continue to run a strongly expansionary budgetary policy while growth accelerates.”

“To do so, would imply a shift from the pursuit of counter-cyclical policy during the crisis to a massively pro-cyclical stance during the recovery, which would undermine the sustainability of our public finances.”

Mr Donohoe said he believed the upturn in the economy was in an early phase but warned the recovery would be diverse in its impact.

“Some sectors are already regaining pre-pandemic levels of activity, while others will need to change and adapt to reflect a post-pandemic environment. Government policy needs to reflect this reality.”

Mr Donohoe said, the decline in activity after public health restrictions were re-imposed in the first quarter of this year was not as severe as that seen during the first lockdown in spring of 2020.

“Modified domestic demand (MDD), which provides the best measure of domestic economic activity, fell by 5 per cent on an annual basis in the first quarter of 2021, as compared with a fall of 15 ½ per cent in the second quarter last year.”

“This is clear evidence that in the face of some of the most stringent restrictions across advanced economies, firms and consumers have adapted their behaviour.”

The Minister said there was evidence of price pressures, domestically and internationally and these would need to be carefully monitored.

“However, at the moment, my department’s central expectation is that these pressures are transitory.”

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Madrid’s Retiro Park and Paseo del Prado granted World Heritage status | Culture

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Madrid’s famous Retiro Park and Paseo del Prado boulevard have been added to UNESCO’s World Heritage List. The decision, made on Sunday, brings the total number of World Heritage Sites in Spain to 49 – the third-highest in the world after Italy and China.

Up until Sunday, none of these sites were located in the Spanish capital. The Madrid region, however, was home to three: El Escorial Monastery in Alcalá de Henares, the historical center of Aranjuez and the Montejo beech forest in Montejo de la Sierra.

Spanish Prime Minister Pedro Sánchez celebrated the news on Twitter, saying it was a “deserved recognition of a space in the capital that enriches our historical, artistic and cultural legacy.”

Retiro Park is a green refuge of 118 hectares in the center of the city of Madrid. Paseo del Prado boulevard is another icon of the capital, featuring six museums, major fountains such as the Fuente de Cibeles as well as the famous Plaza de Cibeles square.

For the sites to be granted World Heritage status, Spain needed the support of two-thirds of the UNESCO committee – 15 votes from 21 countries. The proposal was backed by Brazil, Ethiopia, Russia, Uganda, Nigeria, Mali, Thailand, Kyrgyzstan, Oman and Saudi Arabia, among others.

Statue of Apollo in Paseo del Prado.
Statue of Apollo in Paseo del Prado.Víctor Sainz

Prior to the vote, the International Council on Monuments and Sites (ICOMOS), the organization that advises UNESCO, had argued against considering the Paseo del Prado and Retiro Park as one site, and recommended that the latter be left out on the grounds that there were no “historic justifications” for the two to be paired.

This idea was strongly opposed by Spain’s ambassador to UNESCO, Andrés Perelló, who said: “What they are asking us to do is rip out a lung from Madrid. El Prado and El Retiro are a happy union, whose marriage is certified with a cartography more than three centuries old.” The origins of Paseo del Prado date back to 1565, while Retiro Park was first opened to the public during the Enlightenment.

Pedestrians on Paseo del Prado.
Pedestrians on Paseo del Prado. Víctor Sainz

The ICOMOS report also denounced the air pollution surrounding the site. To address these concerns, Madrid City Hall indicated it plans to reduce car traffic under its Madrid 360 initiative, which among other things is set to turn 10 kilometers of 48 streets into pedestrian areas, but is considered less ambitious than its predecessor Madrid Central.

The 44th session of the World Heritage Committee took place in the Chinese city of Fuzhou and was broadcast live at Madrid’s El Prado Museum. Perelló summed up the reasons to include Retiro Park and El Paseo de Prado in less than three minutes.

“When people say ‘from Madrid to heaven’ [the slogan of the Spanish capital] I ask myself why would you want to go to heaven when heaven is already in Madrid,” he told delegates at the event, which was scheduled to take place in 2020, but was postponed due to the coronavirus pandemic.

Every year, UNESCO evaluates 25 proposals for additions to the World Heritage List. In the case of the Paseo del Prado and Retiro Park, the site was judged on whether it evidenced an exchange of considerable architectural influences, was a representative example of a form of construction or complex and if it was associated with traditions that are still alive today. The famous park and boulevard sought to be inscribed on the UNESCO list in 1992, but its candidacy did not reach the final stage of the process.

Etching of Paseo del Prado from Cibeles fountain, by Isidro González Velázquez (1788).
Etching of Paseo del Prado from Cibeles fountain, by Isidro González Velázquez (1788).Biblioteca Nacional de España

The effort to win recognition for the sites’ outstanding universal value began again in 2014 under former Madrid mayor Ana Botella, of the conservative Popular Party (PP), and was strengthed by her successor Manuela Carmena, of the leftist Ahora Madrid party, which was later renamed Más Madrid. An advisor from UNESCO visited the site in October 2019.

English version by Melissa Kitson.



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Ryanair reports €273m loss as passenger traffic rebounds

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Ryanair has reported a €273 million loss for its first quarter even as traffic rebounded during the period.

The carrier said it carried 8.1 million passengers in the three month period, which cover April to June. This compares to just 500,000 in the same period a year earlier.

Revenues increased 196 per cent from €125 million in the first quarter of 2020 to €371 million for the same quarter this year. Operation costs also rose however, jumping from €313 million to €675 million.

Net debt reduced by 27 per cent on the back of strong operating of €590 million.

“Covid-19 continued to wreak havoc on our business during the first quarter with most Easter flights cancelled and a slower than expected easing of EU travel restrictions into May and June,” said group chief executive Michael O’Leary.

“Based on current bookings, we expect traffic to rise from over five million in June to almost nine million in July, and over 10 million in August, as long as there are no further Covid setbacks in Europe,” he added.

Ryanair said the rollout of EU digital Covid certificates and the scrapping of quarantine for vaccinated arrivals to Britain from mid-July has led to a surge in bookings in recent week.

First quarter scheduled revenues increased 91 per cent to €192 million on the back of the rise in passenger traffic although this was offset by the cancellation of Easter traffic and a delay in the relaxation of travel restrictions.

Ancillary revenue generated approximately €22 per passenger the company said.

Mr O’Leary foresaw growth opportunities for the airline due to the collapse of many European airlines during the Covid crisis, and widespread capacity cuts at other carriers.

“We are encouraged by the high rate of vaccinations across Europe. If, as is presently predicted, most of Europe’s adult population is fully vaccinated by September., then we believe that we can look forward to a strong recovery in air travel for the second half of the fiscal year and well into 2022 – as is presently the case in domestic US air travel,” he said.

However, the airline warned the future remains challenging due to continued Covid restrictions and a lack of bookings and that this meant it was impossible to provided “meaningful” guidance at the time.

“We believe that full0year 2022 traffic has improved to a range of 90 million to 100 million (previously guided at the lower end of an 80 million to 120 million passenger range) and (cautiously) expect that the likely outcome for the year is somewhere between a small loss and breakeven. This is dependent on the continued rollout of vaccines this summer, and no adverse Covid variant developments,” said Mr O’Leary.

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Switzerland’s Credit Suisse settles with star banker over spying scandal

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CEO Tidjane Thiam was forced to resign in February 2020 after admitting the bank had hired investigators to follow Khan, head of international wealth management, because he had opted to move to arch-rival, UBS.

As well as sending shockwaves through banking circles, the case sparked a criminal probe in Switzerland.

“All parties involved have agreed to end the case,” Credit Suisse spokeswoman Simone Meier told NZZ am Sonntag, which revealed the agreement.

Meier declined to comment further when contacted by AFP.

The public prosecutor of the canton of Zurich has also ended his investigation, as the complaints have been withdrawn, NZZ am Sonntag reported.

Thiam’s resignation followed a torrid six-month scandal that began with revelations in the Swiss press that Khan had been shadowed by agents from a private detective company hired after he joined UBS. 

At one point, Khan physically confronted the people following him.

In October, chief operating officer Pierre-Olivier Bouee resigned, acknowledging at the end of an internal investigation that he “alone” had ordered the tailing without informing his superiors.

He had wanted to ensure that Khan was not trying to poach other employees, according to the internal investigation.

The case was reopened in December 2019 when the bank admitted to a second case of espionage, this time involving the former head of human resources, and then in February after media reports that the surveillance had also targeted the environmental organisation Greenpeace.



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