Trump and Varadkar draw swords but no blood is shed

Business Week: Also in the news was tax, Central Bank turmoil, and the ‘green wave’

US president Donald Trump and Taoiseach Leo Varadkar were expected to cross swords this week on a range of matters including Brexit, the Government's stance on Chinese telecoms company Huawei, and our trade surplus with the Americans.

In the end, the bilateral between the two leaders, held in Shannon shortly after Trump and what seemed like his entire family and White House staff touched down in Co Clare, seemed to go only skin deep.

For one thing, the Huawei issue cropped up only at the press conference rather than during the private sit-down, and both men were at pains to point out that they were more or less on the same page.

The Chinese company has been at the centre of deepening tensions between Washington and Beijing, amid concerns Huawei’s technology could be used by China to spy on sensitive data. Last month the United States effectively blacklisted the company.


Huawei is used by many of the main telecoms operators in Ireland, and the company is expected to be involved in the roll-out of Ireland’s next-generation 5G network. Ireland is of particular interest to the US, given the heavy presence of US multinationals here.

The trade surplus, however, did come up. Varadkar pointed out that we had a surplus over them on goods, but they had a surplus over us on services. However, Varadkar said Trump “was very much aware” that we had a surplus over them overall. Drat.

On Brexit, Trump was his usual substantive self. “I know one thing,” he said. “Ireland is going to be in great shape. I don’t think the Border is going to be a problem.” We can all rest easy so.

Now that Trump has departed, the Government can get back to business as usual. Exchequer figures this week showed tax revenues rose 5.7 per cent to €21.7 billion in the first five months of the year compared with the same period of 2018. However, they were still €253 million below the Department of Finance’s target.

Income tax receipts were 7.1 per cent ahead of target, rising to €1.76 billion, while corporation tax of €1.33 billion was collected. For the first five months, corporation tax receipts were €233 million behind expectations.

Meanwhile, the changing of the guard at the Central Bank is not going as smoothly as the Government might have wished. First, Philip Lane, in his final act as governor, advised Minister for Finance Pascal Donohoe to consider reintroducing bonuses for bankers.

That is, of course, a political minefield, but the argument goes that banks are struggling to hold on to staff in the face of competition from big tech firms and other companies not subject to pay restrictions.

Then there's incoming governor Gabriel Makhlouf who is facing an inquiry in his final weeks as head of New Zealand's treasury after he claimed budget details had been hacked and published by opposition politicians. It later transpired that treasury had mistakenly published the information itself.

The Labour Party’s Joan Burton has called for his appointment to be put on hold until an investigation into his actions in New Zealand concludes.

Elsewhere, Steve Bowcott, chief executive of builder Sisk, claimed the fallout from the row over the €1.7 billion bill for the national children’s hospital had created a “nervousness” that was slowing infrastructure spending.

Companies look to harness ‘green wave’

The long mooted green wave finally crashed on the shores of Ireland and much of western Europe a fortnight ago, and it hasn’t taken long for several Irish companies to try to tap into the mood.

Firstly, Ryanair claimed this week that it had the lowest greenhouse gas emissions per passenger of any European airline as it released figures detailing its impact on the atmosphere for the first time.

Aviation is one of a number of industries coming under pressure as public fears about global warming grow, because it adds to the carbon-dioxide emissions that are heating the planet.

Ryanair’s figures showed it produced 66g of carbon dioxide per passenger for every kilometre its craft travelled in May.

Meanwhile, over at State-owned ESB, the power company borrowed €500 million in the Republic's first ever "green bond" to finance electric vehicle recharging points and renewable energy.

The ESB said on Tuesday it had issued a €500 million bond to European investors that is due to be repaid in June 2030 at an interest rate of 1.125 per cent.

Then there's AIB which set a target of making €5 billion of green loans available over the next five years, including products to make homes more energy efficient, finance for electric cars and renewable energy.

The bank said in a statement provided to The Irish Times that it planned, as the State’s largest mortgage lender, to launch “propositions that will support and recognise customers committed to having a more energy-efficient home”.

Industry sources said this may include mortgages with a marginal interest rate discount for homes with a top energy rating. AIB also plans to offer additional discounts through car distribution partners for the financing of the purchase of electric vehicles.

Other stories

There was a raft of other Irish companies with stories to tell this week. First, DCC agreed a deal to sell a generics drug business with operation in Ireland and Britain to Duke Street, a London-based private equity house. It declined to state the sale price.

Elsewhere, petrol station operator Applegreen said it could not rule out selling 29 hotels it acquired when it bought British rival Welcome Break for €360 million. Its chief executive, Bob Etchingham, said a decision would be made following a review this year.

In the world of tech, the online payments company Stripe led a $22.5 million (€20 million) funding round for Step, a mobile banking start-up aimed at teenagers, which was founded a year ago.

It is aimed solely at the “pre-banked” generation and aims to teach them financial literacy through its mobile app.

Staying with tech, US customer services company Genesys, which bought Galway company Altocloud last year, is shifting about €1.4 billion of its global intellectual property (IP) assets into its Irish business.