The Irish Independent reports that the Dublin Airport Authority (DAA) is to withdraw a €30m restructuring deal for Shannon airport if unions don't agree to accept it before the end of this week.

DAA director for change John Horgan issued the ultimatum yesterday and accused the unions of refusing to engage in the talks on the Shannon restructure.

The DAA is seeking 200 voluntary redundancies out of a staff of 520 and intends outsourcing functions including catering.

The DAA move comes against a background of a projected €130m loss over the next decade.

Mr Horgan said: "The DAA has offered to pay €30m for an agreed restructuring of the airport, but the unions have refused to talk about it."

Talks on the future of the airport have been going on for one year, and Mr Horgan said there have been over 50 meetings at all the State's industrial relations machinery and institutions, but no progress had been made.

Mr Horgan said Shannon would make a small profit this year, but not sufficient for an airport with over 3m passengers going through it.

Last April, the Labour Court imposed a two-month deadline for the talks to be completed.

"It looks like the unions are not going to ballot members."

Mr Horgan said that if unions don't accept the deal, the airport will make savings in the operation of the airport.

Airport management earlier this month shut down one of the bars in the terminal.

In the deal, the 300 workers at Shannon airport who opt to remain in their jobs are to receive lump sum payments of up to €10,000.

The voluntary redundancy package gives staff with over 24 years' experience a €100,000 pay-off, while staff can get their pensions at 55.

The Irish Independent also reports that as many as 75,000 Irish people who have holiday homes in Spain may owe tax on their properties, a leading tax practitioner said yesterday.

The number of Irish people with homes abroad is seen as an area of major growth, with conservative estimates of between €5bn and €6bn being invested by Irish individuals in 2006.

This includes at least 3pc of maturing SSIAs, or €495m, which is forecast to be invested in foreign property, according to Willie Kearney and Barry O'Donnell of Foreign Tax Returns Ltd.

The tax specialists warned there are now an estimated 200,000 Irish property owners in Spain alone, and these people can be targeted by the Revenue Commissioners.

Mr O'Donnell said: "The Irish Revenue have highlighted the fact they will be investigating Irish property ownership abroad, and they can request information from their tax counterparts in Europe such as Spain, France and the UK."

The company has launched a service in which it submits tax returns in foreign jurisdictions.

The Irish Times reports that the Government may cut back the number of shares it will sell in Aer Lingus because of fears over short-term speculation in Aer Lingus sharesby hedge funds.

A large number of US- and EU-based hedge funds - (which are largely unregulated and privately managed investment funds that use aggressive financial strategies) - have subscribed for shares in the airline.

Instead of accepting all offers from hedge funds, the Government now has the option to retain a higher-than-expected stake, which would reduce the shares available to these funds.

Its target is to reduce its holding from 85 per cent to 25 per cent, raising up to €293 million for the Exchequer.

The final decisions on both the price of the Aer Lingus shares and the number to be sold will be made later this evening, with the Department of Finance playing a key role.

The final price is likely to be struck close to €2.35 a share, although this is subject to change depending on late demand.

Today is the closing deadline for bids to be received from big investment funds, including hedge funds. Hedge funds are a concern because they may "stag" the flotation by selling shares for a quick profit as soon as market dealings commence.

If the Government retains a bigger stake than 25.1 per cent it can squeeze out the hedge funds.

Despite the concern over hedge funds, the banks advising on the initial public offering (IPO) are expecting more major institutions to come forward today.

A source close to the IPO said the level of hedge fund interest was not abnormal for this stage in the process.

The source said the co-ordinators of the offer were broadly happy with the quality of the list of investors, and believed that the Government could sell its whole Aer Lingus stake with a degree of comfort. However, the Government may prefer to sell fewer shares to ensure the flotation is not disrupted by hedge funds.

The Irish Times also reports that a liberalised aviation market involving the US and the EU, which would be a key driver of growth for Aer Lingus, is not likely to be agreed until next year, the chairman of British Airways has said. Current talks on a so-called "open skies" deal have "run into the ground," he said.

Martin Broughton said that there was little chance of a deal in the short term, if not longer. He said one of the key parties was the US congress.

"The Americans won't do anything before the November mid-term elections. I find it hard to see anything happening this year. But I'd prefer to see people accept that negotiations have run into the ground and its best to step back, sit back and think about the final destination," Mr Broughton said.

"I think when you step out along a road, you need to know your destination. There hasn't been any agreement on the destination. I think it's time for the two sides to step back from negotiation and decide what the destination is. For example, the US administration cannot deliver the EU's vision of what the destination should be. Only congress can deliver that."

Asked whether EU governments like the Republic should concentrate instead on agreeing their own deals with the US, Mr Broughton said this would be the wrong approach.

"One of the great successes of the EU is the open aviation area in Europe. It genuinely is a single market. Anyone can fly anywhere. Ireland has taken the maximum advantage of that. It is entirely logical that the competence for negotiating deals with other markets should be at the EU level. To go back to the national level makes it harder to continue the EU single market."

He said the limit on Aer Lingus flying into more than a handful of US airports should be changed. "I would have thought that would be part of the first stage, when you know what the end result is."

According to the Aer Lingus prospectus, Minister for Transport Martin Cullen may try to conclude a bilateral deal between the Republic and the US, if a wider US/EU deal cannot be advanced.

But Mr Broughton said the negotiating power in reality rested with the EU Commission.

He was speaking after addressing the Institute of European Affairs in Dublin on the issue of transatlantic aviation and business links.

His speech was entitled: Europe and America can play golf, but can they do business?

"It's not like we are asking for anything that is un-American. When you are think of what we are looking for, an open aviation market, it is precisely the romantic American ideal," he commented.

The Irish Examiner reports that Bank of Ireland may face strike action as the row over pensions for new entrants to the bank deepened yesterday.

The Irish Bank Officials Association (IBOA) said this followed the failure of talks at the Labour Relations Commission to have the dispute resolved.

As a result the union said it has not ruled out further industrial action if the bank proceeds to introduce the new deal for new employees early next month.

IBOA general secretary Larry Broderick said: “The failure by Bank of Ireland to defer implementation of its proposed new pension scheme for new staff, pending negotiations at the Labour Court, leaves IBOA with no alternative but to refer the issue as a matter of urgency to the National Implementation Body (NIB) as allowed under the terms of Towards 2016.

Mr Broderick added that the failure of the bank to defer unilateral implementation of the new pension scheme was unacceptable.

He said that the new scheme “will leave thousands of new entrants in relative poverty in years to come, smacks of one of the worst examples of corporate greed and arrogance, displaying total contempt for the industrial relations mechanisms of the State and even more for its own staff who through their hard work generate massive profits for the bank”.

The IBOA’s Bank of Ireland executive committee will have an emergency meet this week to discuss strategy and evaluate different options for escalating the dispute further. “At this juncture, IBOA would not rule out taking industrial action in Bank of Ireland,” he warned.

In a separate statement the bank rejected the latest IBOA criticism of its pension plans for new staff from October 1.

It said: “New employees will have a very attractive pension prospect at retirement under the new arrangements”.

The bank also described the IBOA criticism as “misleading” saying that new employees who contribute the full top-up amount under the new scheme will have the prospect of a 66.7% pension after 45 years service in addition to index linking and the State pension.

The Financial Times reports that Britain’s fight to defend its flexible labour market – including the right of its workers to put in long hours – has reached a decisive moment in Brussels and nerves are starting to fray.

Tony Blair, Britain’s prime minister, has spent years building a coalition of European Union countries prepared to defend the UK’s exemption from EU working time legislation. But now it is crumbling.

“They’re getting a bit desperate,” says John Monks, the head of the European Trade Union Confederation. “They thought they were pretty secure and had everything blocked off, but now they’re not so sure.”

In a sign of growing anxiety in Downing St, Mr Blair tried to strike a deal with Romano Prodi, Italian prime minister, to shore up the alliance which has so far backed the right of British workers to choose to work more than 48 hours a week.

Under the deal, reported by the FT on Saturday, Mr Blair offered to set aside Britain’s free-trade principles and to support anti-dumping duties on cheap Chinese and Vietnamese shoes, if Italy backed the UK on working time.

The offer would have forced up the price of shoes in Britain’s shops and amounted to a startling about-face. Unfortunately for Mr Blair, the Italian government thinks it can assemble a majority of countries to support shoe duties without British support.

In any case, Cesare Damiano, Italian labour minister, has told British officials that he would not support Britain over working time, whatever deal Mr Prodi may have offered on behalf of his Italian coalition.

Mr Damiano, a former union leader, believes Britain’s “opt-out” from the 1993 working time directive exploits workers and gives the UK an unfair advantage over those countries which apply the law.

His view is widely shared across Europe, notably in France and Spain. For the European left, Britain’s “long hours” work culture is an abomination and displays a lack of solidarity with workers across the EU.

So why has the debate on the working time directive become so fraught that Mr Blair was prepared to suspend his belief in free trade and risk a confrontation with British retailers and consumers?

The answer is that the EU’s Finnish presidency plans to return to the subject in November and Britain’s “blocking minority” of countries prepared to defend the opt-out in the EU employment council is fragile.

Britain’s position was secure as long as Germany, Italy and Poland were on side, along with smaller liberal countries such as Slovakia and Malta.

But Italy switched sides when Mr Prodi’s centre-left government came to power this year. The UK would be defeated if Poland’s crisis-hit coalition did the same.

“There was a moment last June when we were discussing this when the Poles looked like they were going to abandon the Brits,” says one EU official. “They’re very worried.”

British business views the opt-out – obtained by Britain’s Conservative government in 1993 – as vital. So does Gordon Brown, the chancellor of the exchequer and likely successor to Mr Blair. Mr Monks says Britain’s defence of the working time opt-out has been “the biggest diplomatic initiative seen in peacetime”, driven by Mr Brown’s refusal to let Europe undermine the UK’s flexible labour markets.

Britain has indicated it would make some compromises, including agreeing a maximum working week which would not be less than 60 hours.

The UK insists workers should continue to enjoy the individual right to opt out from the normal EU maximum of 48 hours. “Personal choice is very important,” says one British official.

However, the concessions offered so far by the UK are not enough for countries such as France, which know that Britain could be forced to give more ground as its 13-year defence of its flexible labour markets comes under further strain.

The FT also reports that tumbling oil prices on Monday led to a sharp drop in German inflation, boosting the chances of the eurozone rate falling later this week below the European Central Bank’s 2 per cent target for the first time in 20 months.

The steep fall in energy costs this month will cheer the ECB as it attempts to bring headline inflation back in line with its target of “below but close” to 2 per cent.

But the drop creates problem of communication as the central bank prepares to lift its main interest rate again next week by a quarter percentage point to 3.25 per cent on the back of strong economic growth in the first half of the year.

The latest inflation data may diminish expectations that ECB interest rates will continue to rise in 2007.

Based on results from six federal states German inflation fell to an annual rate of just 1.1 per cent this month, on a harmonised eurozone basis, compared with 1.8 per cent in August and the lowest since March 2004. As a result, eurozone inflation figures on Friday are likely to show an annual rate of 1.8 per cent or 1.9 per cent for September, economists said, down from 2.3 per cent in August. Eurozone inflation has not been below 2 per cent since January 2005, when it was 1.9 per cent.

After next week’s ECB meeting in Paris, Jean-Claude Trichet, ECB president, is expected to stress the volatility of monthly statistics and draw attention to longer-term inflation threats. The bank had seen the surge in headline inflation this year as a largely temporary, oil-driven phenomenon, and will not have been surprised by Monday’s data.

But eurozone inflation is expected to creep higher later this year, and a three percentage point rise in German value added tax next January is expected to push the headline rate back significantly higher than 2 per cent at the start of 2007.

Moreover, the ECB fears that the recent buoyancy of eurozone growth will make it easier for companies to pass on higher costs to customers and encourage faster wage growth, resulting in stronger underlying inflationary pressures.

IG Metall, the German trade union, last week secured an inflation-beating 3.8 per cent wage rise for 85,000 steel workers, although the sector’s exceptional strength meant that settlement might not necessary set a trend.

Julian Callow, economist at Barclays Capital, said Mr Trichet would signal after next week’s meeting that monetary tightening would continue. “The battle to control inflation expectations is not yet over,” he said. ECB interest rates would level out at 3.5 per cent at the end of this year, however.

Oil prices fell to a six-month low of below $60 a barrel on Monday.

The New York Times reports that in a legal blow to the tobacco industry, a federal judge in Brooklyn ruled yesterday that people who smoked light cigarettes that were often promoted as a safer alternative to regular cigarettes can press their fraud claim as a class-action suit.

Judge Jack B. Weinstein of Federal District Court in Brooklyn found “substantial evidence” that the manufacturers knew that light cigarettes were at least as dangerous as regular cigarettes.

The decision, coming at a time when the tobacco industry felt it was on a legal winning streak, raises the possibility that so-called lights cases will become a major threat to the companies and expose them to potentially significant damages.

The case, first filed in 2004, is against Philip Morris USA, R. J. Reynolds Tobacco, British American Tobacco, Liggett Group, Brown & Williamson and Lorillard Tobacco. It differs from many previous tobacco lawsuits in that it does not claim that smokers suffered personal injury. Instead, the case — called the Schwab case after the lead plaintiff, Barbara Schwab — claims that the industry defrauded consumers beginning as early as 1971, when Philip Morris began selling Marlboro Lights, the first light cigarette.

Because some 45 percent of smokers currently smoke light cigarettes, potentially vast numbers of people nationwide could be involved.

Michael D. Hausfeld, a partner at Cohen, Milstein, Hausfeld & Toll who is representing the plaintiffs, has said that the class could reach tens of millions of people and involve damages of up to $200 billion. The racketeering law being cited would allow any damage award to be tripled.

Investors yesterday drove down the price of tobacco stocks. Shares of Altria, whose Philip Morris division makes half the nation’s cigarettes, fell 6.4 percent to $77.06.

But before the case can proceed to a jury trial, the class-action ruling would have to be upheld by the United States Court of Appeals for the Second Circuit. Some litigation experts expressed strong doubt that it would survive such an appeal.

William S. Ohlemeyer, associate general counsel of Altria, said “the judge is wrong on the law and wrong on the facts.”

Mr. Ohlemeyer said that the government, not tobacco companies, promoted the idea that lights were a safer alternative cigarette.

He added that Supreme Court decisions and court rules prohibit treating fraud cases as class actions because each individual claim of reliance on false statements must be proved.

Still, yesterday’s ruling is a setback to what tobacco companies have previously described as an “improving legal environment” for the industry.

Tobacco companies in recent months had won a string of victories. In July, the Florida Supreme Court upheld a decision to toss out a $145 billion judgment in a class-action suit. In December, the Illinois Supreme Court threw out a similar $10 billion judgment against Philip Morris.

Then last month, Judge Gladys Kessler of Federal District Court for the District of Columbia issued a scathing decision in the Department of Justice’s landmark racketeering lawsuit. She concluded that the tobacco industry had engaged in a 40-year conspiracy to defraud smokers about the health dangers of tobacco, including deceptions about lights and low-tar cigarettes.

But while Judge Kessler ordered tobacco companies to stop labeling cigarettes as “low tar” or “light” to convey that they were less hazardous than full-flavor cigarettes, she said an earlier ruling prevented her from awarding what could have amounted to $10 billion in damages.

Yesterday’s ruling also throws uncertainty into long-running plans by Altria, the parent company of Philip Morris, to separate its Kraft Foods unit from its domestic and foreign tobacco businesses. After several decisions favorable to tobacco companies within the last year, investors had driven up the price of Altria’s shares in anticipation that it would spin off Kraft in the coming months.

David Adelman, a tobacco analyst at Morgan Stanley, said in a conference call with investors that Judge Weinstein’s ruling would probably delay a restructuring. He said he expects that if tobacco companies are successful in their efforts to get a review of Judge Weinstein’s decision before the trial begins, which could be as early as January, a Kraft spin-off could take place by the end of the first quarter of 2007.

Mr. Adelman said that based on past rulings and what he called the “conservative” nature of the Second Circuit appeals court, he expected such a review to be granted. If it is not, the Schwab case will proceed to a jury trial.

While plaintiffs’ lawyers have been filing such class-action suits against cigarette makers since the early 1990’s, this is the first lights case to be certified as a class action in a federal court. Currently, three other lights cases have received class certification, all in state courts and encompassing fewer numbers of smokers.

Judge Weinstein rejected the defense claim that the case was so “enormous in scope and time and in diverse persons affected” that there was no reasonable and inexpensive way to try the case.

The judge said that a central theme of American justice was that “each right has a remedy” but that it was impractical to try individually the fraud claims of tens of millions of smokers.

The judge took note of past court decisions limiting class-action cases and expressed doubt that litigation has done, or can do, much to reduce the damage done by smoking.

“Nevertheless,” Judge Weinstein ruled, “where a cigarette smoker can demonstrate that he or a group of smokers has been damaged by the cigarette industry, the help of the court in resolving the claim and defenses is mandatory.”

Judge Weinstein also took note of the agreements the tobacco companies reached with the state governments, suggesting the companies could end up paying damages twice.

“The independent political-economic arrangement” the tobacco companies made with the states “to pay them billions of dollars over many years has not compensated smokers for the individual damages they have allegedly suffered,” the judge wrote. He also wrote that widespread “partial acknowledgments” by tobacco companies that cigarettes are dangerous, and their efforts to reduce smoking by children and others “does not negate any liability for past” misconduct.

Judge Weinstein has a history of decisions that favor class actions and proposing novel solutions to settle cases. In an earlier tobacco case, the Second Circuit Court of Appeals overturned his certification of a class.

Professor Geoffrey P. Miller, who teaches class-action litigation at New York University Law School, was among the lawyers who said they expected the Second Circuit Court of Appeals to overturn the class-action certification.

“It is important to remember that it is not a crime per se to lie, nor is it a violation of law to lie,” Professor Miller said. Proving fraud requires showing both that the companies lied and that customers relied on those lies, which means that “technically each individual class member has to show reliance on the fraudulent statements,” he added.

Victor E. Schwartz, general counsel for the American Tort Reform Association, which seeks major limits on class actions, said that “the flaw in Judge Weinstein’s decision is the idea that there is always a remedy for every alleged injury, which simply is not true.”

Trying cases one smoker at a time has resulted in a few victories for smokers, but many more victories for cigarette makers.

Philip J. Hilts, author of the 1996 book “Smoke Screen,” which relied on internal cigarette industry documents to show that the companies knew cigarettes were addictive and dangerous but did not alert consumers, said that cigarette makers have good reason to fear a class-action lawsuit.

“With a class action you get higher legal firepower and you get the principle discussed, not that this person quit smoking a while ago or says he smoked more than he did or whatever detail diverts from the principle,” Mr. Hilts said.

Cigarette smoke contains thousands of chemicals, some of them known carcinogens. Some lights are advertised as having less nicotine, a highly addictive substance.

Light cigarettes are manufactured differently from regular cigarettes. They have microscopic holes that the companies say dilute the smoke. Medical researchers have found that people draw harder and deeper on lights, often filling their lungs with more toxic material than they would get from regular cigarettes, said Dr. Stanton A. Glanz, a cardiologist at the University of California, San Francisco medical school who is a longtime antagonist of the cigarette makers.

Matthew L. Myers, president of the Campaign for Tobacco-Free Kids, an anti-tobacco group, said he thought the latest ruling could embolden plaintiffs’ lawyers to file new lights cases.

Judge Weinstein and Judge Kessler’s legal decisions have also heightened calls for federal regulation of cigarettes. Senator Frank R. Lautenberg, Democrat of New Jersey, introduced legislation on Sept. 7 that would ban the use of the terms “light’’ and “low tar.’’

While Mr. Lautenberg is one of 28 Democratic and Republican sponsors of another bill that would give the Food and Drug Administration authority to regulate tobacco, Dan Katz, chief counsel for Mr. Lautenberg, said that this new bill is needed as a more immediate stop-gap measure.

The NYT also reports that the United States continues to lead the world in nanotechnology research, but the influence of the government’s multibillion investment in the field may take decades to become apparent, according to an assessment of the National Nanotechnology Initiative done for Congress.

The National Research Council’s hopeful but guarded analysis fulfilled a requirement in a 2003 law that the initiative be reviewed every three years.

The report concluded that coordination among the many arms of government involved in nanotechnology had improved since the adoption of the law, which transformed the research begun under President Bill Clinton into a permanent program with an annual budget topping $1 billion.

But the report cautioned that too little money was being invested in understanding the potential health and environmental risks of manipulating matter on such a small scale.

Nanotechnology refers to a rapidly expanding range of devices and industrial processes that manipulate atoms and small clusters of molecules — materials measuring from 1 to 100 nanometers, or billionths of a meter. At such dimensions, traditional materials can develop valuable behaviors, like unusual strength, electrical conductivity or invisibility to the naked eye, and can be recombined with other materials to form novel drugs, foods and devices.

It is assumed that nanotechnology will have a huge economic effect in the decades to come. But there is also concern that the novel materials will bring new safety risks that could take decades to be fully understood.

The Research Council report said that because nanotechnology was a foundation technology that makes other innovations possible, the research spending could logically be compared with early investments in computing and communications technology, whose influence took 20 to 40 years to become apparent.

But the report warned that as things stand now the government had neither enough consistency in the way investments are classified and tracked nor the management structure needed to accurately assess what it was getting for its nanotechnology spending.

It said the 50-member panel of public and private nanotechnology experts set up to advise the government’s technology managers was too broad and too busy elsewhere to provide much help in setting priorities, and should be replaced with a smaller, more dedicated group.

The report also urged the program’s managers to enlist the Labor and Education Departments in a more coordinated effort to get students and workers the training needed to cope with nanotechnology, bridging disciplines like biology, physics and materials engineering.

The finding that safety research is underfunded echoed a report last week by a panel of experts assigned by President Bush’s National Science and Technology Council. In testimony on that report last Thursday before the House Science Committee, some experts said that the less than $40 million being spent annually on such research was too little.

They also said that scientists at each agency were selecting their own projects independently without much central direction.

But, in a reflection of the challenges ahead, one leading expert told the committee that attempts to centrally dictate research priorities may not work as well as some people believe.

“I have to tell you that this area is so complex that I don’t know of any person or a small group of people who would be smart enough to be able to identify all the risks, set the priorities and lay out a so-called game plan,” said the expert, Arden L. Bement Jr., director of the National Science Foundation.