Ireland’s Money Market Funds industry will remain intact following new EU reforms – Hayes
Brian Hayes MEP for Dublin and lead negotiator for the EPP on the EU’s Money Market Funds (MMF) Regulation today (Thursday) welcomed the ECON Committee vote of approval on the final text of the new Regulation. MMFs are highly liquid short-term cash management instruments used mainly by corporations and governments seeking to diversify their portfolios. Ireland is the leading domicile of Money Market Funds in the EU.
“The Money Market Funds Regulation has been one of the most contentious pieces of EU legislation in recent years. This outcome has taken over 3 years to achieve but the final agreement is a hugely important milestone for Irish funds.
“What is most important in the final agreement is that both sides of the Money Market Funds industry – Constant Net Asset Value funds (CNAV) and Variable Net Asset Value Funds (VNAV) – will continue into the future, albeit under stricter conditions.
“The Commission’s original proposals effectively put a ban on CNAV Money Market Funds by imposing a 3% capital buffer requirement, an impossibility for these funds to achieve while maintaining normal operations. This would have had a disastrous effect on the Irish funds industry, which has over €400 billion worth of CNAV domiciled funds.
“The final agreement has replaced current CNAV funds with two new types of funds – Public debt CNAVs and Low Volatility NAV funds. Additional safeguards such as strict daily and weekly liquidity requirements, diversification limits and escalation procedures will now be applied to these funds to ensure that they can cope with market shocks and potential run risk. There will also be increased transparency requirements where fund managers must give investors weekly updates on the portfolio of their fund.
“The right balance has been achieved between addressing the systemic risk features of Money Market Funds but also ensuring that the essential features of CNAV funds can continue and be used by corporations and governments who depend on such funds to sustain their short-term financing needs.
“In Ireland, we have a thriving funds industry but unfortunately this has often been under threat by the EU’s heavy-handed fund regulation agenda. We cannot let large Member States set the agenda on key financial services files that exclusively suit their own interests.
“The outcome of the Money Market Funds Regulation shows that small Member States can really have a big influence on EU legislation. Due to significant Irish efforts in the European Council and the Parliament, we have managed to defend Irish interests successfully. But as we enter a post-Brexit environment these key financial services issues will become harder for Ireland to defend.”
Hayes encourages Dublin Local Authorities to be first in line for EU free WIFI initiative
Fine Gael MEP, Brian Hayes has today (Wednesday) called on the four Dublin Local Authorities to apply for the new EU free WIFI initiative. The initiative known as “WIFI4EU” is expected to be launched in the first half of 2017 and will provide free high quality internet access in parks, public buildings, villages and towns.
“Three months ago WIFI4EU was unveiled with the aim of providing free wifi access in all villages and towns in the EU by 2020. A lot of progress has been made since then with plans to put the initiative into practice in a number of towns and villages expected before summer 2017.”
“WIFI4EU will be funded directly by the EU’s Connecting Europe programme. A total of €120 million will be provided for the initial role out. It will allow Local Authorities such as Dublin City Council, South Dublin County Council, Fingal County Council and Dun Laoghaire/Rathdown County Council apply for funding to equip parks, public buildings and village squares with high quality wifi access.”
“Role out of the initiative will be on a first come first served basis. It is a great opportunity for the four local authorities in Dublin to provide a service to Dublin citizens. I strongly support the initiative and hope the Dublin authorities will apply to participate,” concluded MEP Hayes
The Irish Left is Addicted to Failure
Article by Brian Hayes MEP published in the Irish Daily Mail on Wednesday 7th December 2016
In Ireland Sinn Fein, the AAA, PBP and other hard left politicians get a very easy ride from the media. Their policies or solutions are never properly scrutinised, which allows them to make speeches in which they pretend to provide solutions.
Last weekend at his party conference People Before Profit TD Mick Barry put it very well when he accurately described the tactics of the hard left by saying that “militancy pays”. It was a very interesting choice of words. Being against everything and not being responsible for solutions, and profiting politically from such tactics – is a dangerous place for the country to be heading assuming the left can build from their current position.
In reality, these groups are addicted to failure. They need to country to go down because it suits their political agenda. They are not interested in good news, they are not interested in economic success and they are certainly not interested in the country doing well. Their only interest is in tearing down what they describe as the “system”. They want to take power at some point without ever describing what they might do with that power. And that’s what they have in common with Europe’s radical right wing parties – they both thrive in times of economic uncertainty and both employ similar tactics.
The water campaigns were mana from heaven for the left. Now that we may finally be moving towards a solution, which in my view must involve paying back law abiding citizens who paid up for the charge, the left will be the first to claim betrayal. Solving the issue is not in their interest politically.
Both hard left and hard right have a lot in common. They are opposed to international trade and believe in economic protectionism. In fact, the Irish left and Donald Trump share many of the same economic ideas and certainly employ similar tactics.
Public sector pay is currently a major headache for the government. Their room for manoeuvre is limited not just because of the Lansdowne Road Agreement (LRA) but also because of the uncertainty of where growth in the economy will be. Roughly, a third of all expenditure relates to public sector pay and pensions. When the LRA is completed in 2018 the lowest paid public sector workers will have achieved full pay restoration. But where do SF and their hard left allies stand on all of this. They are happy to pose with people striking but are never questioned about what they would do. Of course they were against the LRA and the Haddington Road Agreement precisely because of pay cuts to lower paid public servants. Yet both agreements have delivered full pay restoration for that group of public servants. Are they ever called out on this? No chance.
They got it completely wrong on the recovery. Since 2012 the country has experienced a strong jobs rich recovery, almost cutting unemployment in half during the past four years. Do you remember Gerry Adams telling us not to draw down the IMF money or Pearse Doherty saying that the promissory note deal established no savings to the state?
The left call for the abolition of property taxes and water charges, increased spending on services, more public sector pay, increased spending on investment. But never realistically set out how this can be funded. Even when they claim that rising existing taxes will allow more expenditure – they spend the same money over and over again. It’s a big con trick which is played in the media.
Take the sale of Aer Lingus for example this time last year to IAG. The left indulged in an orgy of condemnation of the takeover. “Treachery”, cried Claire Daly, Paul Murphy called for “a veto on further privatisation”. Sinn Fein’s Dessie Ellis said that IAG had no interest staying in Ireland. He even called for a referenda on the sale of Aer Lingus. Along with a referenda on water, CETA, TTIP and whatever your having yourself! If SF ever got into government, we would face a referenda every week. That’s another tactic of the both political extremes – a constant demand for more and more referendums, as the established parties or the Dail cannot be trusted to make decisions.
What the hard left cannot admit is that the sale of Aer Lingus has been a success. All of their predictions have not come to pass. Since the takeover Aer Lingus has increased capacity, added new aircraft and new routes and boosted its staff numbers to over 4,000 with further expansion planned in 2017.
They also want to rid the world of the multi nationals. Ireland’s membership of the EU and large scale investment by international companies have transformed our country into one of the most successful countries in the world.
Ireland has travelled a very long way indeed since the 1950s. According to the UN Human Development Index, Ireland is now in the top ten most developed countries in the world. In fact Ireland was joint 6th with Germany in the 2015 Index; but you never see this important piece of information highlighted.
The parties of the hard left and hard right thrive on negativities and false promises. They trade in exaggerated claims and fake indignations. They believe that solutions are not for them. They want chaos and revolution everyday because without that they cannot get their hands on power. But just as things are improving for Ireland after a terrible period – we cannot take that improvement for granted. Every politician should be held accountable for what they say. Especially those who historically get it so spectacularly wrong.
Opinion piece by Brian Hayes MEP published in the Irish Independent on Tuesday 6th December 2016
Renzi’s back-me-or-sack-me gamble was a spectacular political own-goal
One of the constants in European politics is the ever-changing state of Italian politics. Its unpredictability is always fascinating to watch. Any political system that has seen 63 changes of government since 1945 can be considered interesting to say the least.
Just as it was difficult to abolish the Seanad, so too has it proven difficult to radically reform the Italian senate.
The great American psychologist Abraham Maslow wrote extensively about political leadership. In essence, he said that any successful leader must be one of the crowd and also slightly ahead of the crowd in order to make progress on the political stage. For Maslow, the politician can never get too far ahead of himself. His writings from the 1960s throw up some particularly suitable lessons for Italian Prime Minister Matteo Renzi.
On a large turnout, the scale of Mr Renzi’s defeat over the weekend was decisive. It cannot have been a surprise given his unpopularity and the very sluggish performance of the Italian economy. He promised two years ago in coming to office to get people back to work but over that time unemployment, youth unemployment especially, has grown. There are lessons to be learned from this.
Politicians who promise referendums need to be very aware of the consequences. Mr Renzi has now gone the way of Mr Cameron.
Mr Renzi’s promise to ‘back me or sack me’ in the context of this latest referendum campaign was a spectacular mistake. A politician putting a gun to his own head is asking for trouble. As we know in Ireland, it is never about the substance of the referendum, other matters always intrude.
Mr Renzi totally underestimated the level of opposition to his proposal, which it seems was a step too far in centralising power in Italy, in what is in effect a federal system. But, crucially, 80pc of the ‘political establishment’ in Italy opposed his reforms – this was a victory for the elite.
The real question now is: will this referendum make much difference to the EU and the eurozone or is this just the usual melodramatic Italian politics playing out?
It’s certainly a blow for a pro-European leader who was serious about reform. But it doesn’t mean automatically that the Five-Star Movement is on the verge of coming into government in Italy with an In/Out EU membership referendum. Don’t forget that the next official date for an Italian general election is 2018.
Despite Mr Renzi’s political termination, prompting some to unwisely believe this to be yet another example of disruptive politics following on from Trump and Brexit, nobody should underestimate the setback for the far right in Austria with the election of a pro-European president.
It’s not inevitable that the populists from the far right or far left will always win in the current political environment. Possible maybe, but certainly not inevitable.
The truth is that political and economic uncertainty will continue in the eurozone until the outcome of the French and German elections are known in 2017. For the centre to hold it requires that both France and Germany elect pro-European governments – something that looks possible in the French case even with the rise of Marine Le Pen. Until we see the outcome of both elections, economic turmoil on the stock and currency markets will continue.
The markets have responded calmly to the referendum result. The immediate effects of the Italian referendum result could well mean a slightly weaker euro, which from Ireland’s perspective is not the worst outcome given the buffeting that our exporters and Border retailers have taken of late.
It also means that the European Central Bank (ECB) will have to continue with its quantitative easing programme, injecting yet more cash into the European banking system as investors look in vain for returns. We will know more on Thursday when the ECB issue its latest assessment on the eurozone.
The real problem for Italy, which could still cause contagion elsewhere, is the condition of their banking sector and especially the Monte dei Paschi Bank. Mr Renzi’s defeat makes the resolution of this bank more difficult as the resolution process is now under the new European banking rules which require bail-ins and not bailouts.
The problem with this bank in Italy is that it has lots of small mom-and-pop type investors (close to 40pc of its shareholder base) who may be hit in a final EU resolution plan without finding adequate new money.
Are there too many Italian banks? Have they an exposure on non-performing loans and probably need more cash?
The answer to both of these is probably yes and a solution will have to be found, but in speaking to people here in Brussels there is no sense that this is Lehman Brothers all over again.
Meanwhile, in among all the turmoil some good news from the ESRI yesterday. It predicts average annual growth of 3pc for the next decade.
Imagine that, growing the Irish economy by more than one-third in a decade.
And that’s without any promise to have another referendum!
European Parliament ECON Committee 5th December 2016
Brian Hayes MEP questions Elke König, Chairperson of the Single Resolution Board
A Transitional Arrangement must be part of final Brexit deal – Hayes
Brian Hayes MEP today said that following the formal exit of the UK from the EU, there must be some sort of transitional arrangement to allow firms trading into and out of the UK to adapt to new arrangements.
“Whenever the UK formally exits the EU, businesses all over Europe are going to have to adapt to a new UK-EU trading regime. This will not be easy and some businesses will have to restructure a large part of their operations. If we have no transitional period, that could mean that trade barriers and tariffs could be imposed overnight between Ireland and Britain.
“While many will treat this as part of the negotiations, it should be a no-brainer that there is a phase-in period to allow all sectors to adapt to a new Europe.
“This will be a hugely important issue for Ireland and the government needs to be prepared to make a strong case for a sufficient transitional period to allow Irish firms to adapt. We don’t know what is going to happen to the €1 billion traded each week between Ireland and the UK following Brexit. A transitional period will be vital to making the whole process smoother. Some 42% of Irish food and drink exports – worth €4.1 billion – went to Britain last year; what will happen to this industry? We do not want tariffs and trade barriers to arise overnight.
“This is not about prejudicing the Brexit negotiations that are likely to start early next year. This is about providing some certainty to everyone in the post-Brexit landscape. It has been remarked that if we go straight into the new post-Brexit trading regime, there will be a cliff effect for many sectors not only in the UK but in a wider European context.
“For financial services, this is especially important. Financial services are traded in and out of the UK at huge levels every day. Firms in the UK have signed up to the EU’s post-crisis financial architecture and it simply cannot happen overnight that these firms can sign up to a new system of financial regulation. Without any transitional period, we don’t know what kind of effect this will have on Europe’s whole financial industry.
“A transitional period would also help regulators in other EU Member States to deal with the large volume of new authorisations of financial services companies establishing themselves outside of the UK. This will be particularly significant for Dublin where many financial services entities have already started preparing to move.”
EU Clean Energy Package gives Ireland a platform for a low carbon economy – Hayes
Brian Hayes MEP today said that the EU’s Clean Energy Package gives Ireland the platform to optimise a mix of renewables, energy efficiency and fossil fuels to meet a low carbon future in a cost efficient way.
“The EU’s Clean Energy Package should give us the real impetus to deliver a low carbon energy mix in a cost efficient way. One of the key proposals from the Commission is that the majority of coal subsidies will be phased out over five years. I hope that this package prompts the government to act urgently to adopt a clear plan and put a firm date on the phase out of coal. Our dependency on coal is too high at the moment. Moneypoint, the only coal-firing powerplant in Ireland, is running at high capacity and provides about 21.5% of our electricity needs.
“Phasing out coal would resolve the perverse situation of financially supporting the introduction of renewables while at the same time offsetting the emission benefits by using a heavily emitting coal plant.
“As the Climate Commissioner, Miguel Arias Canete, said: ‘Europe is on the brink of a clean energy revolution’. Ireland needs to work harder if we want to be part of Europe’s clean energy revolution.
“The Smart Buildings Initiative included in the package will be a major boost for Ireland’s energy efficiency tools. This initiative which expects to mobilise €10 billion by 2020 will transform our building stock, help us meet our EU emissions targets and importantly it will create much-needed jobs all over the country.
“We need to do more to help households become more energy efficient by providing better insulation and reconditioning to ensure proper thermal efficiency.
“The government must see this package as a way to optimise a low-carbon energy mix for the future given that we can no longer depend heavily on fossil fuels. Our share of renewables has to increase and energy efficiency systems need to be strengthened so that everyone can contribute to lower carbon emissions.”