The Government, while it will not relish the task, has much to do with a semi-State sector which is suffering from persistent neglect. CIÉ needs investment, especially at Iarnród Éireann.
The deregulation of the electricity market has succeeded in driving up ESB prices when the opposite was expected. An Post, which faces complete deregulation in four years' time, has been unable to shrink its cost base and will report large losses for 2004.
Aer Lingus, in contrast, performed exceptionally well this year, with profits growing to some €100 million but the certainty of even greater competition from low-cost carriers prompted another round of voluntary redundancies aimed at bringing staff numbers down by 1,600.
But while the company has taken steps to confront the challenge that lies ahead, the Government has dithered on the crucial issue of ownership. If Aer Lingus is to be denied even partial privatisation (because the Government fears it would be a vote-loser), then how is it to finance its development, especially in regard to the €1 billion that will be required for new aircraft? Unfortunately for the staff and customers, the Government may be tempted to fudge for as long as it can, given that it has already begun to focus on the next general election. Is it any wonder that the airline's three most senior executives decided to bale out?
Neither is the future clear for our major airports. It is open to question whether Cork and Shannon, as stand-alone airports, will prosper to a greater extent than would have been the case under the Aer Rianta umbrella. Shannon has become a base for Ryanair, but the airport is talking about significant job losses. An expensive new terminal is being built at Cork but can it generate the increased traffic levels to justify it? The entire Aer Rianta debt is to be borne by the Dublin Airport Authority, but Dublin Airport itself suffers from appalling congestion and needs a new terminal.
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The banking sector was in the news for all the wrong reasons during the year. Earlier this month the Irish Financial Services Regulatory Authority (IFSRA) published its report on what it called "unacceptable behaviour and practices" at AIB. The document examined firstly the bank's response to the overcharging of its customers and secondly the activities of the offshore company, Faldor, in which some former senior AIB executives were involved.
The fact that AIB overcharged its customers for foreign exchange transactions, perhaps through an administrative error, was understandable though not excusable. However, the bank's action, when its management became aware of the overcharging, of continuing the overcharging amounted to the deliberate pilfering of funds from its customers. Furthermore, IFSRA noted that AIB may have hoped to regularise its charges without ever owning up to what it had done.
It is extraordinary that AIB can escape financial penalty for a deliberate and sustained breach of banking practices - although new legislation will give the regulator power to impose fines in similar cases in the future. It is even more extraordinary that AIB can emerge from such an episode unscathed. Yesterday, its share price closed at €15.28, the highest price for the year. Clearly "unacceptable behaviour" is not something which troubles the investment community.
The High Court inspectors' report into National Irish Bank earlier in the year, unlike the IFSRA examination, apportioned blame and named names. Many of the bank's middle and senior management, the report concluded, had full knowledge of the unacceptable issues surrounding non-resident accounts and the sale of investments in Clerical Medical International but did nothing. The bank's new owners-to-be, Danske, will face a difficult task in restoring confidence among customers and the public at large.
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The outlook for the economy in 2005 is very favourable. Growth is likely to be about 5 per cent, considerably higher than the projected OECD average of 2.9 per cent. Undoubtedly, the fall in the rate of inflation and continued low interest rates are having a beneficial effect. However, the weak dollar policy being pursued by the US administration is making it much more difficult for Irish exporters. China's renminbi continues to be aligned with the dollar, so the Asian economic giant benefits from a cheap currency as well as from much lower wage costs.
The Economic and Social Research Institute says that employment here grew by some 44,000 this year and it forecasts that next year will bring a further increase of about 35,000 jobs. The State, we are told, is getting close to full employment status despite the presence of 158,600 on the live register of unemployed. FÁS says that the economy will need a large number of immigrants in the coming years to meet high-skill vacancies and perhaps to fill unskilled posts as well. As if on cue, in the seven months from May 1st, 50,000 workers from the EU's new accession states came and took up jobs here.
Even if we reach that status of "technical" full employment, there will, it seems, still be well over 100,000 on the dole. The State must do all that it can in terms of training and incentives to bring them back into the workforce. It could start by introducing measures that will ensure people returning to employment do not lose out financially, especially through loss of secondary benefits such as medical cards. The unemployment rate is less than half the euro-zone average, and that is some achievement. But it is no justification for giving up on those on the fringes.