Enda Kenny is trying — but he’s staring down cul de sacs in Brexit diplomacy

THE Taoiseach hasn’t wasted any time meeting relevant political figures following the UK’s Brexit vote, but he doesn’t seem to be making any real progress in this slow bicycle race. He explained to German chancellor Angela Merkel about the special situation Ireland represents with the UK, but she basically said Ireland’s voice would be the same as other member states.

He announced an all-island forum only to be shot down by the North’s first minister Arlene Foster. Last week he met British Prime Minister, Theresa May. They both agreed there would be no return to the old “hard border” of watch towers and permanent security presence.

It wouldn’t have taken much for them to agree on that point, given there is no longer a major conflict going on and such a security presence would be completely irrelevant.

In fact the Taoiseach emerged from the meeting talking about how technology could be used to simplify and speed up customs checks at the border.

Even if the UK secures a deal to retain access to the single European market, it is expected to leave the customs union. This is the union which binds the UK to trade deals the EU has with other non-EU countries around the world.

In other words, customs checks would have to be in place for goods originating outside Ireland but perhaps travelling through Ireland to the UK.

If the UK loses full access to the single market, the level of checks on goods travelling across the border would need to be a lot more stringent. Technology can help but I doubt economic activity on the border between Norway and Sweden for example, is quite as varied and colourful as it is between Louth and South Armagh.

Both May and Kenny talked about preserving the Common Travel Area which allows free movement of people between Ireland and the UK including around 30,000 people per day crossing the border.

Unfortunately, it won’t be our decision as to whether that stays or remains. We don’t know if our European colleagues will allow it to remain in place.

After an early round of shuttle diplomacy by the Irish Government, London, Brussels, Berlin or Belfast is not committing to very much at all. A return to some kind of border looks very likely.

This comes in a week when a survey found that 92pc of Northern businesses believe Brexit will negatively impact on the region in the next five years. Just 2pc think it would be good — which shows the bizarre priorities of the DUP in backing a Leave vote.

Meanwhile south of the border, 92pc of Irish exporters see the Brexit vote as hurting Irish exporters.

There is little scope for optimism that Ireland will secure a good deal from anybody in the Brexit power play.

Where’s the meat in the Irish banking sandwich?

JUICY headlines about AIB making €1bn profit in the first half of this year, give the impression that everything is rosy in the garden for the bank just now. It is also returning another €1.8bn to the State, as part of its €22bn taxpayer bailout which also sounds good.

Looking below the headline figures you can see that around half the profit came from things that have nothing to do with its core business of lending money. Half the profit was attributable to write-backs where it had set aside more money for losses than it needed, and the exceptional gain from the sale of its stake in Visa Europe.

The bank has done well to grow its profits despite having to cut its standard variable mortgage rates, which is something more than its main rival Bank of Ireland has done.

With big profits, attention turns once again to the discussion about selling off a strategic stake.

But AIB’s new lending figures are the most troubling. They remain incredibly modest. In the first half of 2016 its Irish operations lent out €2.4bn in new lending drawdowns. That was just €200m more than in the same period last year. This is despite the fact the economy is growing at 5pc per year.

Take mortgage lending where in the first six months it lent out €770m, just €20m more than in the first half of 2015.

Its personal lending was just €70m higher while business lending was only €100m higher.

When it comes to mortgages and personal lending, the drawdowns it attributes to the first half of 2015 are actually different to the level of drawdown it claimed at the time.

These estimates have been rounded in a way which heightens the level of new lending growth.

The question is why isn’t it lending out any more? It may reflect a lack of appetite for debt. Or maybe it is still just too hard to get a loan. Or it could simply reflect the fact that lots of people out there are still not suitable credit risks in the bank’s eyes.

Comparable figures for Bank of Ireland are hard to get because at least AIB gives a very clear breakdown between loan approvals and loan drawdowns during the period.

AIB continues to repair its legacy loan book and retain a strong balance sheet. This is helping it to repay some of the billions it received from the taxpayer and that is to be welcomed.

However, the lack of a serious loan growth story, this far into the Irish economic recovery, doesn’t augur well for the State’s expectations of a big payday from selling off some of its banking interests.

Ryanair’s O’Leary is still great value at €3.5m

DON’T expect the 33pc hike in Michael O’Leary’s Ryanair remuneration package to lead to a shareholder revolt at the airline any time soon.

He earned a total of €3.5m last year in return for running Ryanair, which he has done since 1994. The airline has dramatically grown profits in recent years; re-invented its customer offering, and returned several billion to shareholders in the form of buybacks and special dividends.

And in O’Leary’s case the question of remuneration is different to other chief executives.

First of all he is so heavily invested in the airline, with a stake valued at over €600m.

Secondly, his pay is relatively modest given the size and success of the business and his role in that.

And thirdly, his remuneration is overshadowed by the €71m he received from Ryanair in the last five years through special dividends alone.

His 51m shares are worth €606m. He is even up €1.4m on the 300,000 shares he bought at €6.96 two years ago.

Perhaps we should put his €3.5m remuneration package in context. The airline is making profits of over €1.2bn per year on revenues of €6.5bn. Patrick Coveney, over at sandwich maker Greencore, received remuneration of €4m in 2014 running a company with profits that are less than one tenth those of Ryanair.

Smurfit Kappa boss Tony Smurfit is on around €3.3m running a business that makes around half Ryanair’s profits.

Albert Manifold at CRH is on around €5.5m and the building materials group made around €1bn last year.

Of course not everyone is happy at Ryanair. Those who bought shares last Christmas at €15 are down 20pc in seven months. Perhaps they should have hedged by betting on a Brexit Leave vote?