The Irish Independent reports that Aer Lingus admits its handling of customer complaints has been poor.

And now the airline, which made this admission yesterday, is putting together a taskforce to improve its customer service.

Frustrated customers, unable to get a response from the airline, have turned to the Director of Consumer Affairs.

But the State consumer watchdog was itself unable to get a response from the airline, and was forced to send its inspectors to Dublin Airport a number of times in 2005 and again this year.

A spokesman for the watchdog said yesterday its inspectors took the unusual step of calling in person to the Aer Lingus head office because of repeated failures by the airline to respond to them.

The Consumers Affairs staff had been unable to get a response on behalf of disgruntled customers by phone, letter or e-mail.

"Aer Lingus communications with us were unsatisfactory.

"We would not normally go out to visit a company, but we were unable to get a reply," the spokesman said.

The national airline had scaled back its customer complaints section over the past few years, as it moved to turn itself into a low-cost carrier.

But the airline admitted yesterday it is now attempting to bolster its customer complaints department. It said a taskforce had been put together to review ways of improving their service.

A spokeswoman said staff from the Director of Consumer Affairs office had called to Aer Lingus headquarters up to three times at the end of last year and twice this year.

"This matter arose because of a backlog in handling customer queries in Aer Lingus at the moment," he said.

"We have added extra personnel due to the extent of the queries and we have put together a taskforce to deal with it.

"We aim to speed up how we deal with queries, because we do recognise it is an issue and we want to have it sorted out by the summer."

Complaints about everything from missing bags to charges have not been dealt with for weeks on end.

The Irish Independent also reports that a refusal to allow a 12c increase on the price of a stamp could lead to €70m losses for An Post in four years time, it has been claimed.

Communications Regulator ComReg's block on a stamp price hike from 48c to 60c for a standard letter threatens the financial recovery of An Post, the High Court has heard.

An Post chief executive Donal Curtin claimed ComReg has put An Post "back on a financial knife edge in the immediate future".

If An Post does not get an adequate price increase, it will lose at least €6m this year, break even next year, and losses will grow to €5m in 2008, €30m in 2009 and €70m in 2010, he said.

The High Court yesterday granted An Post leave to challenge the regulator's decision.

ComReg has effectively imposed a price freeze on the obligatory and loss-making letter post service of An Post, a company which is at risk and whose entire recovery plan is dependent on a price increase, said Mr Curtin.

Much of the recovery plan, he added, was constrained by An Post's legal obligations in relation to workers' pay. The Labour Court had in November 2005 fixed the future wage costs of the company.

Increases

The refusal of the price increase also has "grave consequences" for the provision of postal services in the State, especially the standard letter post service, Mr Curtin said.

Although the intention of the relevant legislation was that charges for the letter service should be enough to cover costs, that was not the case, Mr Curtin said.

The continuing decline in the number of letters sent, due to technological advances, exacerbated the problem and ComReg had failed to take account of this.

An affidavit from Mr Curtin was presented yesterday to Mr Justice Micheal Peart by Gerard Hogan SC when counsel sought leave to take a legal challenge.

It is aimed at overturning ComReg's decisions of December 20 last refusing a letter stamp price increase and imposing various conditions and discounts on any increases sanctioned for large packets and envelopes.

Mr Hogan said ComReg had failed to take into account An Post management's view of the grave position the company would be in without letter price increases, and had instead sought to "micromanage" the company although it had no such power.

ComReg had failed to recognise that the postal sector is unique, among regulated utility services, in that demand for its core product is in fundamental decline.

In his affidavit, Mr Curtin said ComReg's decisions failed to take into account the obligations on An Post, under the Postal and Telecommunications Services Act and under various EU Postal Services Directives, to ensure the company has sufficient revenue to enable it be properly financed and to avoid deficit financing.

A recovery plan was approved by the board and the Minister for Communications in 2003 to minimise losses. It involved major job losses with 600 jobs shed to date and increased revenue generation, including price increases.

The Irish Times reports that strong data on the German economy, together with hawkish comments from top European Central Bank (ECB) officials yesterday, gave rise to predictions that euro-zone interest rates will increase by a further three-quarters of a percentage point before the end of the year, starting as early as May.

In a sign of growing inflationary pressures in the German economy, producer price inflation in February reached 5.9 per cent year-on-year, Germany's Federal Office of Statistics confirmed yesterday.

The rate has strengthened from 4.6 per cent in October to its highest reading since 1982, a development blamed on energy price pressures.

Leaving out energy prices, producer prices grew by just 1.1 per cent annually, according to the statistical office.

Meanwhile Germany's chamber of industry and commerce, or DIHK, yesterday produced a survey showing business optimism soaring to five-year highs.

"The signs for the economy this year are better than any time in five years. Real economic growth of 2 per cent is consistent with our findings. This means that Germany's economic development is at last benefiting from an improvement in the global business cycle," said DIHK chief executive Martin Wansleben yesterday.

The business group has raised its forecast for economic growth in Germany from 1.5 per cent to 2 per cent.

ECB president Jean-Claude Trichet yesterday reinforced last week's warnings from ECB chief economist Otmar Issing about the amount of cash circulating in the euro-zone economy and that inflation remained above the ECB's reference rate.

"We have inflation that is above 2 per cent. We must do everything we can do to counter the risks of inflation," Mr Trichet told French television station LCI.

Alan McQuaid of Bloxham Stockbrokers predicted a further three-quarters of a percentage point rise in ECB rates by the end of the year.

"We think the risks to the euro-zone interest rate cycle are to the upside this year, with the odds clearly pointing to the ECB's key lending rate being no lower than 3.25 per cent come year-end, from 3 per cent previously," he said.

The ECB's key lending rate - the so-called main refinancing rate - now stands at 2.5 per cent.

A three-quarter point rise in the refinancing rate before end year would imply an equal increase in the ECB's marginal lending rate, as well as the deposit rate, the ECB's two other key policy rates.

l Mr Trichet last night said euro-zone countries must free up their labour markets to cope with globalisation.

His comments followed French protests against relaxed job protections.

The Irish Times also reports that Apple Computer could today be forced to open up its digital music business to competitors after a vote in the French parliament.

The owner of iTunes, the online music store, and the iPod digital music player, will have to choose between making downloaded music compatible with rival platforms or pulling out of France if, as expected, the parliament in Paris approves a draft copyright law.

Software in digital downloads from iTunes prevents music being played by any rival to the popular iPod, but the French bill seeks to impose "interoperability" on online music stores and break Apple's closed system.

"It is unacceptable that . . . the key should be controlled by a monopoly. France is against monopolies," said Martin Rogard, an adviser at the French culture ministry.

"The consumer must be able to listen to the music they have bought on no matter what platform."

Mr Rogard said it was "desirable" that France led in this respect, but hoped that it was the start of a Europe-wide move to open up digital music.

Competitors such as Sony and Microsoft would also have to comply with the legislation, but some rivals see it as a chance to break Apple's grip on the online music market.

Steve Jobs, Apple's chief executive, has said that three million songs a day are sold on iTunes. The website has more than 70 per cent of paid digital downloads in some markets.

"The French seem to be leading the way in being a little bit more anarchic and taking a stand," said Rudy Tambala, head of Virgin Digital, a UK-based online music store.

However, others in the information technology industry said forcing Apple to admit competitors to a new market it was instrumental in creating could be seen as sending the wrong signal to technology companies.

The draft copyright law, which implements an EU directive on intellectual property, has already been the source of controversy. Record companies and artists were enraged last year when an ad hoc coalition of MPs succeeded in pushing through a parliamentary amendment that legalised peer-to-peer file-sharing

The Irish Examiner reports that a good day for Irish consumers with the prospect of reduced grocery prices was how the National Consumer Agency described yesterday’s abolition of the Groceries Order.

But the Irish Creamery Milk Suppliers Association warned that the gain for consumers from a populist measure will be short-lived and will result in further pressure on farmers and Irish food processors and manufacturers.

Enterprise Trade and Employment Minister Micheál Martin, who announced the legislation, said the Groceries Order acted against the interests of consumers for the past 18 years. “The single most important reason for getting rid of the order is that it has kept prices of groceries at an artificially high level by allowing suppliers to specify minimum prices below which products could not be sold.”

RGDATA, which represents independent grocers in Ireland, warned consumers, however, to be vigilant and aware of the pricing practices of large multiples following the abolition of the order. Director general Tara Buckley predicted that the large multiples would engage in pricing gimmicks and practices that will reintroduce the concept of loss leaders into Irish retailing.

She also warned that large retailers would recover the cost of any savings on grocery goods from either consumers or suppliers and that consumers’ need to be constantly vigilant to make sure they are not duped.

But the National Consumer Agency chairperson Ann Fitzgerald said the prices of groceries have been kept artificially high because shops were stopped by law from passing on to consumers discounts which they received from their suppliers. Shops are now free to compete on price.

Meanwhile, the umbrella body for the food and drink industry warned that the Government’s amendment to the competition legislation, while well intentioned, won’t work as it will be impossible to police.

Food and Drink Industry Ireland (FDII) director Paul Kelly said action can only be taken after the damage is done. “The key issue is whether the Irish consumer, our food industry and retailers will be operating in a regime which ensures fair trade and prohibits dominance in the marketplace and predatory pricing.”

The Financial Times reports that a US federal appeals court on Monday threw out the 2004 obstruction of justice conviction of former star technology investment banker Frank Quattrone, saying the judge in the case had given erroneous instructions to the jury.

The appeals court sent the case back for retrial and demanded it be heard by a different judge. The ruling dealt a blow to the federal government's efforts to crack down on alleged white-collar crime. It followed a similar ruling by the Supreme Court last year voiding the criminal conviction of now defunct accounting firm Arthur Andersen. A retrial would mark the third time Mr Quattrone, who emerged as the top technology banker of the 1990s, has faced a federal jury.

The first trial ended with no decision after a jury was unable to reach a verdict. In the second trial, a jury convicted Mr Quattrone of two counts of obstructing justice and one count of witness tampering. He was sentenced to 18 months in prison, but remained free pending his appeal. The Department of Justice on Monday said prosecutors were reviewing the appeals court ruling and assessing their options.The government's case hinged on a December 2000 e-mail in which Mr Quattrone encouraged subordinates to clean out their e-mail files.

Mr Quattrone sent the e-mail after learning of federal inquiries into the awarding of shares in hot initial public offerings being handled by his former firm, then known as Credit Suisse First Boston. Federal prosecutors said the e-mail constituted a knowing effort to thwart the investigations. In the previous trial Mr Quattrone responded that he did not know the extent of government requests for documents when he sent the e-mail.In its ruling on Monday, the appeals panel ruled that US district judge Richard Owen, the federal judge who presided over Mr Quattrone's second trial, erred when he told jurors they could convict if they found that Mr Quattrone called for the destruction of documents requested by the government even if he did not know exactly which documents were covered by the request.

"Clearly, that instruction is not a correct formulation of the law," the appeals court wrote. "Under the charge, as given, any defendant who urges the destruction of documents might run afoul of [the law] without any proof that the defendant knew the documents were subject to a subpoena."The appeals panel based its ruling in part on the 2005 Supreme Court decision invalidating the Andersen conviction.

In that ruling, the court said that the instructions in the case wrongly allowed the jury to convict without finding that Andersen employees acted with criminal intent when they tampered with documents relating to Enron, the energy trader. The exact wording of jury instructions is expected to be a major issue in the criminal trials of former Enron chief executives Jeffrey Skilling and Ken Lay.New trial: Frank Quattrone.

The FT reports that Gordon Brown, Britain’s finance minister, on Wednesday will launch a concerted attempt to boost London’s standing as a global financial centre, conceding the government must do more to promote one of the pillars of the British economy.

As he prepares to unveil an annual Budget statement that has the promotion of the UK’s “high value added” industries as a central theme, Mr Brown will announce plans to enhance London’s status as one of the world’s leading financial centres in the face of stiff global competition.

Mr Brown will say he is joining forces with about a dozen leading City institutions – such as the London Stock Exchange, the Lloyd’s insurance market and Euronext-LIFFE – to “develop and support a co-ordinated strategy” for the City that will be published in the summer.

Alongside the Budget, the Treasury will also publish a detailed analysis of the challenges facing London as a financial centre, arguing that the City “cannot be complacent about its strengths”.

In recent years, Mr Brown has sought to protect the City’s status as a financial centre, most notably facing down plans for a European Union withholding tax on bonds. But Wednesday’s initiative is an indication of the UK government’s concern that London must retain its status amid fierce competition to win new business in China and India.

The City – which has 70 per cent of the world’s secondary bond market and more than 30 per cent of the world’s foreign exchange business – provides a lot of revenue for the Treasury.

Alan Yarrow, chairman of the London Investment Banking Association, said: “The City has been very successful but what we’ve lacked so far is any recognition inside government about just how beneficial that is for the UK. My sense, however, is that Gordon Brown is now genuinely engaged on changing this.”

Mr Brown’s focus on the City will be at the heart of the Budget’s broader theme to market the strength of the British economy internationally. Central to this drive will be an overhaul of UK Trade and Investment, the government’s export promotion body, so that it focuses more on trade links with India and China.

The New York Times reports that Ben S. Bernanke, the newly installed Federal Reserve chairman, suggested yesterday that the central bank would need to pay more attention to global financial conditions in setting interest rates, moving beyond its traditional focus on domestic economic forces.

In a speech to the Economic Club of New York at the Grand Hyatt Hotel in Manhattan, Mr. Bernanke said that to understand the reasons behind movements in American bond yields "an explanation less centered on the United States might be required."

In only his third speech since being sworn in as Fed chairman last month, Mr. Bernanke was also skeptical about the argument that the economy will slow in the near future, a view that many investors may take as a sign that the Fed is not quite near the end of its string of interest rate increases.

Mr. Bernanke built the prepared text of his speech around one of the most pressing puzzles in financial markets today: Why do long-term bond yields remain so low despite steadily rising short-term interest rates?

Traditionally long-term rates have fallen when investors have anticipated a slowdown in the economy or a decline in inflationary pressures. But Mr. Bernanke argued that other factors —including a worldwide imbalance between abundant savings and less robust investment — may be a more powerful explanation for the current phenomenon.

Over time, however, the challenge will come in determining whether global forces are likely to push rates lower than otherwise might be the case — or higher. The answer, Mr. Bernanke said, will be increasingly crucial to the conduct of monetary policy. If long-term yields are low primarily because investors are buying more long-term bonds — be they Chinese central bankers trying to manage the yuan's exchange rate or global investors more comfortable with long-term securities because of a decline of economic volatility — they would be adding an extra lift to consumer spending and business investment. That would tend to push the Fed to raise its key interest rate a little more than it might otherwise have considered appropriate.

"If spending depends on long-term interest rates, special factors that lower the spread between short-term and long-term rates will stimulate aggregate demand," Mr. Bernanke said. Other things being equal, he added, this "argues for greater monetary policy restraint" and higher short-term interest rates.

On the other hand, if the low bond yields are indicating that investors expect an economic slowdown around the corner, it might require the Fed to take a different tack.

The behavior of long-term bond yields has perplexed financial investors for many months. Starting in June 2004, the Fed has raised short-term rates from 1 percent to 4.5 percent in quarter-point increments. Yet the 10-year Treasury bond yield has inched ahead only slightly, and is now less than a quarter of a percentage point higher, creating a pattern known as a flat yield curve.

Financial investors awaited Mr. Bernanke's speech in hopes of combing it for signs of when the Fed might end its series of interest rate increases. The Fed is widely expected to raise its key rate another quarter of a point at its meeting next week, but analysts are divided over whether it will echo that increase in May.

Yet beyond discarding the notion of an economic slowdown, Mr. Bernanke refrained from providing any precise indication of what to expect from the Fed. "The implications for monetary policy of the recent behavior of long-term yields are not at all clear-cut," he said.

There was virtually no reaction in the bond market to Mr. Bernanke's speech, with yields on 2-year notes and 10-year bonds remaining nearly identical.

"This speech is not going to change anybody's mind that the Fed will raise interest rates next week," said Ashraf Laidi, chief currency analyst at MG Financial Group in New York. "But it leaves up in the air what the Fed will do at its next meeting in May."

Mr. Bernanke agreed that domestic factors were still highly important in determining long-term rates, pointing out that the drag on consumer spending from higher-priced energy and expectations that the housing market will cool might be keeping long-term interest rates low even as short-term rates rise.

But he threw a new element into the mix: the possibility that what he has referred to as a "global savings glut" — an excess in global savings over global investment — might also be weighing on long-term rates, with ambiguous implications for American monetary policy.

Considering all these elements left Mr. Bernanke perched on the fence. To the extent that lower long-term yields merely reflect investors increased appetite for long-term debt, he said, "the policy rate associated with a given degree of financial stimulus will be higher than usual."

But "to the extent that long-term rates have been influenced by macroeconomic conditions, including such factors as trends in global savings and investment, the required policy rate will be lower."

It is a familiar game plan for Microsoft. From the spreadsheet to the Web browser, the company has rarely been a pioneer, but it has been very successful as a fast follower in new markets.

"This is classic Microsoft strategy, never a first mover but impressive once they get focused," said Ted Schadler, an analyst at Forrester Research.

In its appeal to developers and companies, Microsoft is promoting its ability to provide Web technology that seamlessly brings together server, desktop and Internet software. Speaking of his company's plan, Bill Gates, the Microsoft chairman, said, "We will definitely have a comprehensive model. And there will be an integration benefit."

Software tools have been a crucial part of Microsoft's success over the years. Yesterday, at a Web designers' conference in Las Vegas, Microsoft announced the release of its toolkit for a technology known as Ajax, which makes it possible for Internet-based software to mimic the appearance and responsiveness of desktop personal computer programs.

For the last couple of years, software developers and start-up companies have been using the freely available Ajax building blocks to construct all kinds of programs quickly and inexpensively.

Those programs range from sophisticated e-mail and collaboration systems to offerings that tie together Web services, like www.housingmaps.com, which links Google's mapping software with property listings on Craigslist, the online bulletin board, to display houses and neighborhoods.

Microsoft executives stressed that its Ajax toolkit will work with browsers and operating systems other than Microsoft's.

But the demonstrations at the conference by partners like MySpace, the popular social networking Web site, and the British Broadcasting Corporation's Web site, showed the Ajax technology working on Microsoft Vista.

The MySpace feature allows a user to put MySpace profiles of friends on the Windows desktop, while the BBC used an Ajax application on Vista as a gateway to the network's programming, allowing for search, download or the sending of copies of programs to friends.

Microsoft has not yet profited from Internet services nearly as much as rivals like Google and Yahoo, which have strong businesses selling ads on their sites. Microsoft competes with them not only on its MSN Web site, but is also developing online software services, Windows Live and Office Live, which will sell ads.

In the competition for online advertising, Microsoft is betting that it can gain an edge by wooing developers with superior software tools. "Neither Google nor Yahoo has a developer framework," Mr. Gates said in an interview. "We think that a lot of advertising will cluster around the software tools that help people."

But software rivals question whether Microsoft's traditional strategy will prevail as more software is delivered as a service over the Internet.

In the past, Microsoft was typically the low-cost supplier, undercutting competitors on price and outselling them.

Yet the new Internet software is often distributed free, or at very low cost for monthly service fees. Conventional software is improved in cycles that stretch on for years, while Internet software can be continuously debugged and upgraded.

"This time, things are very different, and it won't be easy for Microsoft to compete as it has in the past," said Scott Dietzen, president and chief technology officer of Zimbra, a start-up that uses Ajax technology to make e-mail systems.

But Microsoft said that it would pick up the pace of product development on its Internet-related products.

The company showed off the next version of its Web browser, Internet Explorer 7, which will be released later this year. It has features for alerting users if they are about to tap into Web sites known for spyware or phishing. Its new print feature allows users to preview the Web page and make sure they print the entire page, instead of having words on the right-hand side of the page not printed.

Internet Explorer 6, the previous version, was released five years ago. "We're doing a mea culpa saying, hey, we waited too long," Mr. Gates said.

The Microsoft moves, some analysts say, suggest that the company is moving in step with technology and market trends — and those could work to its advantage.

Microsoft, Richard Sherlund, an analyst at Goldman Sachs, wrote in a report yesterday, "seems to be adapting to the new market dynamics in a way that could be complementary to its traditional business. The Web will be an extension of the desktop in a way that becomes more seamless, extending the capabilities of the desktop outward."