This is not a drill: the coronavirus threat to business grows

A Time magazine profile of Tedros Adhanom Ghebreyesus in November noted that the World Health Organisation chief "never stops worrying" – something that was in evidence this week as he grappled with the coronavirus crisis.

“This is not a drill,” he said. “This is not the time to give up. This is not a time for excuses. This is a time for pulling out all the stops. Countries have been planning for scenarios like this for decades. Now is the time to act on those plans.”

In Italy – Europe’s ground zero – they went nuclear. Schools, universities, cinemas and theatres were all closed, while all public events were banned in an attempt to contain the outbreak. A draft decree also told Italians to avoid hugging and shaking hands.

Meanwhile, the number of Irish coronavirus cases more than doubled in a single day, while senior officials suggested there will be hundreds of cases in Ireland by the time the Dáil returns in a fortnight’s time.

AIB to cut 1,500 jobs by 2022 to keep costs in check

---

Web Summit organisers make Toronto event online-only due to coronavirus

---

Irish economy grew 5.5% last year, outpacing European peers

---

Ministers were briefed about the possible widespread closure of schools, postponement of sporting events and other mass gatherings and businesses in order to contain the spread of the virus.

They were also told that while it was too early to assess how the Irish economy would be affected, sectors like agri-food, tourism, retail and manufacturing would be worst hit.

There were cuts to growth expectations left, right and centre as the Government, the OECD and the IMF all responded to the crisis, while the US Federal Reserve announced its first emergency rate cut since the collapse of Lehman Brothers in 2008.

At home, State officials are looking at financial supports for companies affected by the coronavirus outbreak, said secretary general of the Department of Business Orlaigh Quinn.

A member of staff at the Central Bank was in isolation amid suspicions he or she could have the virus, while online recruiter Indeed once again asked all of its employees to work from home – this time until further notice.

Some staff at Google in Dublin were also told to work from home after a co-worker reported flu-like symptoms, while Twitter encouraged all its staff globally to do the same where possible.

Ryanair announced a decision to cut a quarter of flights to and from Italy for three weeks from the middle of this month, while Michael O'Leary said he expects the coronavirus to have a "meaningful impact" on earnings in the first quarter of the year.

Lufthansa also cut its flight capacity in a move equivalent to grounding almost a fifth of its fleet. "We are dynamically adjusting our plans to reflect extraordinary circumstances," a Lufthansa spokesman said.

Elsewhere, AIB cancelled a planned London unveiling of its chief executive's strategic vision for the lender in favour of hosting the event for analysts at its Dublin headquarters.

Online accommodation booking platform Hostelworld said its earnings for 2019 were in line with guidance, but warned uncertainty over the coronavirus outbreak could cost the business up to €4 million in the first quarter of 2020.

A united Ireland on the horizon?

Following the success of Sinn Féin in the general election and the economic divergence of Northern Ireland and Britain after Brexit, ratings firm Moody’s this week said the pressure to hold a Border poll for Irish unification was “becoming difficult to resist”.

However, it warned that such a scenario posed risks for the financial strength of a merged economy, with the North outspending its revenues streams and growing at a much slower rate than the economy in the Republic.

“The Republic is far wealthier than Northern Ireland and its economy grows much more quickly,” it said. “Facilitating some economic convergence between the two entities would be a significant and public policy challenge.

“Northern Ireland’s public expenditure also far exceeds the tax revenue that is generated in the region [transfer payments from the UK national government fills this gap],” the ratings agency said.

For now, though, the economy remains in good shape as the latest exchequer figures, which covered January and February, showed tax revenues higher and spending lower than forecast.

Income tax receipts were 3.3 per cent lower than expected at €3.97 billion, while corporation tax, which hit a record €10.9 billion last year, came in at €583 million. That was 117 per cent or €314 million above profile.

However, speaking at the Irish Tax Institute annual dinner, Minister for Finance Paschal Donohoe reminded us: "One thing we can be certain of is that the current high levels of corporation tax cannot be relied on in the long term."

On the jobs front, the Republic’s unemployment rate was unchanged at a near 13-year low of 4.8 per cent in February. Central Statistics Office (CSO) figures show the number of workers classified as unemployed last month was 120,100.

That being said, staff at Oracle Ireland were told the company was cutting as many as 1,300 jobs across Europe, with Dublin among the locations affected. The technology company employs more than 1,400 people in the capital.

First-time buyers priced out of Dublin

If you’re a first-time buyer in Dublin you will need an eye-watering salary of almost €100,000 a year to secure a mortgage, according to a report by KBC Bank this week.

The study found that the price of new homes purchased by first-time buyers has “virtually doubled” from about €200,000 to €380,000 since 2012. This has eroded affordability for first-time buyers, it said.

A first-time buyer or a dual-income first-time buyer household availing of a 90 per cent loan-to-mortgage would typically need an income of €98,000 to qualify, the report said.

Staying with housing, builder Cairn Homes said landlords backed by investment funds could spend as much as €5 billion snapping up new homes in or close to the Republic’s cities.

Dublin-listed Cairn reported on Tuesday that it sold 1,080 new homes last year, earning a 28 per cent increase in profits to €68 million from €53.2 million in 2018.

Elsewhere, US private equity group Lone Star’s Quintain Ireland secured planning permission to build 153 homes in Portmarnock, Dublin, while plans by developer Joe O’Reilly’s Aeval Unlimited to build 685 new homes at Shankill in south Co Dublin also got the green light from An Bord Pleanála.