A glance at the week that was
The numbers
58thDublin's ranking among the worlds most expensive cities, a fall of 16 places from last year.
€36 millionThe cost of the visits of Queen Elizabeth and US president Barack Obama, almost twice the initial estimate, according to Minister for Justice Alan Shatter.
22mThe number of people receiving a weekly social-welfare payment at the end of 2010, according to the Department of Social Protection.
63The number of rape cases the Central Criminal Court received last year, up 30 per cent on 2009.
171The number of orders of possession granted in the High Court during the first six months of 2011.
We now know
* Laws requiring disclosure of child-sexual abuse claims are to be introduced following the Cloyne report.
* David and Victoria Beckham have named their daughter Harper Seven.
* Ireland has the highest number of young people who have used psychoactive drugs, according to a report by the European Commission.
Hanover or bus for two circus elephants
Two elephants that escaped a circus were later found at a bus stop near Hanover in Germany, local officials said on Tuesday.
Dunia, a 40-year-old Indian elephant, and Daela, a 25-year-old African elephant, were apprehended by police near the city while munching on tree leaves.
The pair had fled 50m from the circus to the nearest bus stop.
“The two elephants were quite co-operative and peaceful,” a Hanover police spokesman, Heiko Steiner, said. “Everyone was amused.”
Most read this week on irishtimes.com
1 Dolphins kept vigil on Irishman’s body
2 Review of Amanda Brunker
3 RTÉ sued over Nob Nation sketch
4 Beyoncé leaves Oxegen breathless
5 Kenny condemns Vatican response to allegations
6 Man charged over buggery with dog
7 16 hours a day, eight months a year
8 Gardai make 90 arrests at Oxegen
9 Irish debt cut to junk status as euro zone crisis deepens
10 U2 guitarist defends tax arrangements
Give me a crash course in . . . Ireland's junk status
Why is the credit rating on Ireland's sovereign debt now 'junk'?Moody's has downgraded the credit rating on bonds issued by the Government to "junk" because it doesn't believe Ireland will be able to raise the money it needs to keep the lights on once the EU-IMF bailout runs out in 2013. As a second bailout could/should involve losses for holders of Irish Government bonds, it follows that only the kind of shadowy speculators who trawl the junkyards of financial markets looking for cheap gems would now buy them.
How does Moody's define junk?Credit ratings are made up of a sliding scale of letters, numbers and mathematical signs, with each rating translating into a different level of investment risk. Anything rated from Aaa to Baa3 (or BBB in the language of the other major western agencies, Fitch and Standard Poor's) is known as "investment grade". Everything below that is junk. Moody's 44-page guide to credit-ratings definitions doesn't use the word junk, though. It instead favours "non-prime", which doesn't look quite so judgmental in a headline.
So if something has a triple-A rating, I can invest my life savings in it?Yes. Unless it's Enron. Or Lehmans. Or one of those subprime-mortgage thingies.
Can Ireland's credit rating get any worse?Yes. Moody's Ba1 rating for Ireland is just the first rung of junk status. We're currently the best kind of junk. Fitch, for example, has just cut Greece's credit rating to CCC.
What does the European Commission have to say about all this?Incomprehensible was the word used by a spokeswoman for its president, Jose Manuel Barroso, to describe the rating and its timing.
But it wasn't, like Rebekah Brooks's knowledge of phone hacking at the News of the World, inconceivable?No, there were plenty of signs that Moody's was going to make Ireland the third in a trinity of junk-rated countries in the euro zone that also includes Greece and Portugal. Once policymakers started hinting at a "reprofiling" of Greece's debt (aka a default), the agencies, whose clients are large institutional investors, were always going to start slapping downgrades at Brussels.
How damaging is the junk rating for Ireland?In the immediate future the downgrade doesn't make much difference, because Ireland isn't borrowing money from private-bond markets. But it will make it harder for the State to regain entry to those markets when the EU-IMF deal expires, which is, if you remember, the reason Ireland was downgraded in the first place.
Sounds like a self-fulfilling prophecy. It's not very democratic, is it?Credit-ratings agencies are not too worried about democracy. They prefer concepts such as stability and sustainability that right now are somewhat absent in the euro zone, what with Greece experiencing difficult-second-bailout syndrome, debt-stricken Portugal desperately trying to keep its head down, Ireland lobbying for lower interest rates, and finance ministers in Italy and Spain getting uncomfortably twitchy. LAURA SLATTERY
Next week you need to know about . . . Irish Life & Permanent's meeting of shareholders
Despite avoiding lending to developers, which has pushed the other banks into State hands, Irish Life & Permanent’s number will finally be up next week. An extraordinary general meeting of shareholders will take place this Wednesday at the former Jury’s Ballsbridge Hotel, in Dublin, to accept a Government handout of €3.8 billion, leaving the State owning 99 per cent of the company.
Irish Life & Permanent dodged a bailout throughout the crisis until the Central Bank’s stress tests last March. The aim of the tests was to overcapitalise the banks in an attempt to win back international confidence, a condition of the EU-IMF bailout.
Even its status as the country’s largest pensions company wasn’t enough to save the business. Permanent TSB borrowed far too heavily in the international markets and lent far too cheaply to become the number-one mortgage lender during the boom.
Only a group of rebel shareholders stand between the company and nationalisation. They gathered enough support to have four resolutions tabled for Wednesday’s meeting, among them a proposal to stop the recapitalisation that will wipe out their investment. But they are unlikely to have enough support to stop the virtual nationalisation of a fifth Irish bank.
AIB will hold its extraordinary general meeting the following week to approve a further State bailout, but its battle is over. What was once Ireland’s largest bank is heading for 99.8 per cent State ownership to meet the latest €14.8 billion capital bill.
Irish Life & Permanent's shareholders, however, have picked a fight and will come out swinging on Wednesday. SIMON CARSWELL