The Irish Independent reports that the ECB's seven interest-rate increases since late 2005 are cooling Ireland's property boom and may help stave off a crash, Central Bank governor John Hurley said yesterday.

The Irish Independent also reports that more than 3,000 new jobs were created last year in Ireland's international financial services sector, according to figures released yesterday in the 2007 Finance Dublin Yearbook.

The Irish Times reports that house prices have stalled in the first three months of the year, according to figures compiled by Permanent TSB and the Economic and Social Research Institute (ESRI).

The latest monthly house price index states there was no increase in prices in February, with prices at the end of that month just 0.1 per cent higher than they had been at the start of the year.

Prices nationally rose by 9.6 per cent on average over the past year - the first time since December 2005 that the annual rate has dipped below 10 per cent. Last August, the annual pace of house price inflation was running at 15.4 per cent.

Rising interest rates and continuing uncertainty over stamp duty reform ahead of the general election have been blamed for holding back prices. The index notes that prices nationally have risen by just 1.6 per cent in the past six months.

A separate survey by estate agents Sherry FitzGerald yesterday stated the average price of a second-hand property nationally had fallen by 1.1 per cent in the first three months of the year. A 2.3 per cent decline in Dublin prices more than offset a marginal increase of 0.2 per cent elsewhere in the State.

Marian Finnegan, chief economist at Sherry FitzGerald, said the fall in prices "largely reflects the impact of a reduction in consumer confidence in the performance of the market" - a situation she said was triggered by "misguided commentary on the future of stamp duty".

Anticipation of a change in stamp duty in the last budget, together with rising interest rates and a "stronger than usual stock of second-hand properties in the market", had served to erode consumer confidence, she said.

Niall O'Grady, head of marketing at Permanent TSB, said moderate price growth was likely this year. "The housing market is clearly in a period of price realignment," he said. "Clearly stamp duty uncertainty in advance of the election is a factor, as are recent rises in interest rates."

While Ms Finnegan foresees a "restoration of confidence in market conditions", Permanent TSB said it was difficult to imagine momentum coming back into the housing market until the stamp duty issue is resolved after the election.

The average property across the State cost €311,078 in February, according to the Permanent TSB/ESRI data, just under €27,000 more than the €284,089 average at the same time last year.

Prices in Dublin rose by 0.2 per cent in February, while the value of property elsewhere slipped 0.1 per cent. Year on year, Dublin homes were 13.2 per cent more expensive, while the value of property outside the capital increased at a more moderate 8.7 per cent. The average price of a Dublin home was €428,850, compared to €267,293 elsewhere.

The commuter counties of Louth, Meath, Kildare and Wicklow saw a 0.9 per cent decline in prices in February after a 0.1 per cent fall in January. However, strong demand last year means prices remain 10.6 per cent ahead of the year-ago period.

First-time buyers saw no change in prices during the month, while for those moving up the housing ladder, prices eased 0.4 per cent. On an annualised basis, first-time buyers are now paying 10.2 per cent more than last year.

One of the strongest growth areas in February was the price of new homes, which jumped 0.7 per cent against a dip for send-hand property. Sherry FitzGerald says demand from first-time buyers remains buoyant, accounting for 34 per cent of property sales this year. Investors also remain active, purchasing 21 per cent of second-hand properties in the first three months of 2007.

The Irish Times also reports that Dublin-based drug development firm Merrion Pharmaceuticals is to list on the Nasdaq market in the United States and on the Irish Enterprise Exchange in Dublin.

The company said it has filed a registration statement with the US Securities & Exchange Commission for a proposed initial public offering of its shares.

Merrion said the proceeds of the flotation would be used to fund clinical trials, including its treatments for bone cancer, prostate cancer and deep vein thrombosis. It also said it may use a portion of the proceeds to license, acquire or invest in complementary businesses, products or technologies.

Last November, Merrion raised €8 million in a funding round it said was oversubscribed. Participation in that funding round was from previous investors in a €6 million funding round conducted in April. The principal investors included Dr Tony Ryan and Declan Ryan, chairman of Merrion. Mr Ryan, who runs Irelandia Investments, joined Merrion's board last summer.

It is understood the firm, which specialises in developing oral dosage forms of drugs that are poorly absorbed, has raised around €20 million since it was set up in 2004.

The Irish Examiner reports that the Cork-based firm Quality Plastics has been bought by the Belgian and Austrian joint venture Pipelife for close to €30 million, according to industry sources.

The company has factories in Mallow and Whites Cross, and employs 174 people.

Sales of €42m were recorded last year. The company delivered profits of €3.43m in the 12 months to the end of March 2006 on turnover of €36m, according to the latest accounts filed with the Companies Office.

The company caters for the plumbing market in Ireland, specifically for hot and cold water solutions, including under-floor heating. It also has a presence in the utility and civil markets.

Quality Plastics also employs seven people in its centre of distribution and sales for Britain at its Corby, Northamptonshire, location. It also exports its products to several countries in Europe.

It produces and sells PEX, PEX multi-layer pipes, PE and PB pipes, and a wide range of fittings and accessories.

Managing director of Quality Plastics, Gary Horgan, said: “From our company’s point of view it is the perfect time to become part of the Pipelife Group. With Pipelife, we have found a partner that will be able to accelerate our growth and give us a real international dimension.”

Mr Horgan and his sister, Karen Horgan, commercial director, will remain in their management roles.

CEO of Pipelife, Miguel Kohlmann, said: “Quality Plastics is a perfect complement for the Pipelife Group. It will reinforce one of Pipelife’s fastest growing product lines, which is hot and cold, in addition to giving the group access to the Irish and UK markets.”

The Pipelife Group is a joint venture between Austrian company Wienerberger and Belgian company Solvay.

It is active in 29 countries and operates 30 factories with 2,800 employees, and achieved pro-forma sales of €823m in 2006.

Solvay is an international chemical and pharmaceutical group with headquarters in Brussels. It employs some 29,000 people in 50 countries. In 2006, its consolidated sales amounted to €9.4 billion, generated by its chemicals, plastics and pharmaceuticals activities.

In 2006, Wienerberger achieved revenue of over €2bn. No purchase price has been disclosed for the sale of Quality Plastics.

The Financial Times reports that Europe has eclipsed the US in stock market value for the first time since the first world war in another sign of the slipping of the global dominance of American capital markets.

Europe’s 24 stockmarkets, including Russia and emerging Europe, saw their capitalisation rise to $15,720bn (€11,819bn) at the end of last week, according to Thomson Financial data. That exceeded the $15,640bn market value of the US.

The rise of the euro against the dollar, growth of east European markets such as Russia and stock market outperformance spurred by improving profitability have seen Europe close a long-held gap with the US. Ian Harnett at Absolute Strategy Research, who identified the move, said this marked a “seismic shift” in markets.

The last time Europe eclipsed the US in market capitalisation was likely to have been before the first world war, said Mike Staunton, stock-market historian at London Business School. The shift mirrors a trend in the debt world, where European activity has caught up, and in some cases overtaken the US.

European shares have outperformed the US, with their market capitalisation rising 160 per cent since the start of 2003 in dollar terms, said Thomson Financial. That compared with a 70.5 per cent rise for the US stock market. Over that time the euro has risen 26 per cent against the dollar.

Europe trails the US on the indices of market capitalisation compiled by FTSE and MSCI and which are used by fund managers as benchmarks.

However, these have a reduced or no weighting to shares that cannot be freely traded such as holdings of governments or controlling family shareholders. Europe has more companies with such stakes.

The FT reports that Apple and several big music companies are facing a European Commission antitrust probe after Brussels issued formal charges alleging that the deals underpinning the sale of music through the hugely popular iTunes platform violated competition rules.

In a surprise development, the Brussels regulator last week sent a confidential statement of objections to Apple and “major record companies”. These are understood to include Universal, Warner, EMI and Sony BMG.

The European Commission’s confirmation of the action came as Steve Jobs, chief executive of Apple, was in London for a joint press conference with Eric Nicoli, head of EMI. Mr Nicoli announced EMI would be making its music available on iTunes online without copyright protection. EMI is the first record “major” to remove digital rights management – the copyright protection that prevents piracy from its catalogue.

The Commission’s main concern is that iTunes’ set-up in the European market prohibits users in one country from downloading music from a website intended to serve another. Its move was triggered by a 2004 complaint from Which?, the UK consumer organisation, criticising the fact that the UK version of iTunes was more expensive than the version in other European markets.

A spokesman for Neelie Kroes, EU competition commissioner, said Apple’s agreements restricted “music sales in the sense that consumers can only buy music from the iTunes store in their country of residence” and that consumers were therefore limited “in their choice of where to buy music and, consequently, what music is available and at what price”. He said: “The Commission alleges that these agreements violate the [EU] treaty’s rules prohibiting restrictive business practices.” Brussels stressed that its allegations had nothing to do with the lack of interoperability between the iTunes format and rival players.

Apple said it had always wanted to operate a pan-European iTunes store “accessible by anyone from any member state” but was advised by music publishers that there were legal limits to the rights they could grant. “We do not believe the company did anything to violate EU law and we will continue to work with the EU to resolve this matter.”

The Commission is now pursuing antitrust investigations against three of the biggest names in US technology. It has already imposed heavy fines against Microsoft in a probe that started almost nine years ago. Microsoft was eventually found guilty of abusing its dominant market position and has been fined close to €780m ($1bn) so far.

There is also a case against Intel, the chipmaker, which Brussels believes has undermined competition from AMD, its only rival.

Should the Commission find Apple and the music companies guilty of breaking competition rules, they would face potentially painful financial sanctions. The regulator has the power to impose fines worth up to 10 per cent of a company’s worldwide annual turnover and has recently toughened up its policy on fines.

But the regulator could also opt for other remedies.

The groups will now be given the chance to defend themselves both in writing and during a hearing in Brussels.

The New York Times reports that United States and South Korean negotiators struck the world’s largest bilateral free trade agreement on Monday, giving the United States a badly needed lift to its trade policy at home and South Korea a chance to reinvigorate its export economy.

Negotiators announced the agreement, the culmination of a 10-month effort.

“This is a strong deal for America’s farmers and ranchers, who will gain substantial new access to Korea’s large and prosperous market of 48 million people,” Karan K. Bhatia, the deputy United States trade representative, said in Seoul Monday .

“Neither side obtained everything it sought,” he added.

If ratified, the trade deal would eliminate tariffs on more than 90 percent of the product categories traded between the countries. South Korea agreed to lift trade barriers to important American products like cars and beef, while the United States agreed to allow Seoul to continue to subsidize South Korean rice.

The agreement is a significant victory for the Bush administration, which needed a prominent deal with clear benefits for American producers to shore up support for bilateral trade pacts with Panama, Peru and Colombia, which have thus far received a cool reception from a skeptical Congress.

Free trade between the United States and South Korea — the world’s largest and 11th-largest economies, respectively — could give American companies an important stronghold in Asia, where they have steadily ceded market share to European, Japanese and Chinese competitors.

The deal may also prompt a wave of bilateral trade pacts as an alternative to stalled multilateral negotiations under the World Trade Organization, economists said Monday.

As South Korean workers and farmers protested in the streets — on Sunday, one man even set himself on fire — negotiators haggled to the end early Monday.

The breakthrough came when both sides compromised on the most delicate deal-breaking issues. Washington dropped its demand that the South Korean government stop protecting its politically powerful rice farmers, and Seoul agreed to resume imports of American beef, halted three years ago over fears of mad cow disease, if, as expected, the World Organization on Animal Health declares United States meat safe in a ruling next month.

South Korea also agreed to phase out the 40 percent tariff on American beef over 15 years. It will remove an 8 percent duty on cars and revise a domestic vehicle tax system that United States officials say discriminates against American cars with bigger engines.

The United States will eliminate the 2.5 percent tariff on South Korean cars with engines smaller than 3,000 cubic centimeters; phase out the 25 percent duty on trucks over the course of 10 years; and remove tariffs, which average 8.9 percent, on 61 percent of South Korean textiles.

Both sides also agreed to discuss the treatment of goods made at an industrial park in Kaesong in North Korea, a capitalist experiment by South Korea in engaging its neighbor. The project has drawn criticism from the United States.

The trade deal “will generate export opportunities for U.S. farmers, ranchers, manufacturers and service suppliers, promote economic growth and the creation of better-paying jobs in the United States,” President Bush said in a letter notifying Congress of his intention to sign the accord.

President Bush said that the trade pact would strengthen ties between the countries — an assessment shared by analysts who had repeatedly warned that the alliance, forged during the Korean War, has frayed during the terms of Mr. Bush and President Roh Moo-hyun of South Korea, largely over policy toward North Korea.

The deal is the biggest of its kind for the United States since the North American Free Trade Agreement in 1994 with Canada and Mexico. It is Washington’s first bilateral trade pact with a major Asian economy.

Studies have estimated that the accord would add $20 billion to bilateral trade, estimated last year at $78 billion. Potential gains to the United States economy range from $17 billion to $43 billion, according to Usha C. H. Haley, director of the Global Business Center at the University of New Haven. South Korea’s exports to the United States are expected to rise in the first year by 12 percent.

Analysts doubt that the deal will provide an immediate lift to American car manufacturers. Only 5,000 American cars were sold here last year, while South Korean automakers sold 800,000 vehicles in the United States. The gap accounted for 80 percent of the $13 billion United States trade deficit with South Korea last year.

American officials hope that the deal will placate American cattle farmers, who are struggling to recapture global market share after an outbreak of mad cow disease in late 2003. Before the import ban, South Korea was the world’s third-largest consumer of American beef, importing $800 million a year.

Consumers in both countries are the deal’s biggest winners. Hyundai cars and Samsung flat-panel TV sets, as well as Korean-made clothing, will become significantly cheaper in the United States.

American beef and oranges, as well as Ford cars and Toyota vehicles built in the United States, will be more affordable in South Korea. South Korean TV networks will be able to broadcast more American movies and TV series like “CSI,” which already command a huge following here, after Seoul eases a cap on foreign content to 80 percent of total airtime from 75 percent.

The deal entails heavy political costs for South Korea, which can expect the loss of tens of thousands of farming jobs. Up to 2 trillion won ($2.2 billion) in agricultural revenue will be lost as cheap American corn, soybeans and processed foods come in, according to studies by South Korean economists.

Once hailed for seeking a greater distance from Washington, President Roh now stands accused by his leftist supporters of turning his country into the 51st state of the United States.

But the South Korean government is desperate to reverse a decline in its competitiveness, as a resurgent Japan outspends it in research and development, and China offers an ever-increasing variety of goods produced with cheap labor.

“President Roh believes the free trade agreement with the United States will serve as a springboard for South Korea to become an advanced economy,” said Mr. Roh’s spokesman, Yoon Seung-yong.

The Bush administration wanted to conclude negotiations with South Korea before its authority to send fast-track agreements to Congress expired July 1. Congress must ratify or reject a trade deal submitted under the special authority, but cannot amend it.

Originally, United States officials said a deal with Seoul needed to be concluded by March 31 in order to take advantage of that fast-track authority, but later said the deadline was April 1. Soon after midnight Sunday, the White House released Mr. Bush’s letter to Congressional leaders, dated April 1.

The NYT also reports that from an 11-story steel-and-glass tower that housed its headquarters in Irvine, Calif., the New Century Financial Corporation ruled as one of the nation’s largest mortgage lenders to individuals with weak, or subprime, credit during the recent housing boom.

That reign officially ended yesterday, when New Century became the biggest, and most prominent, corporate failure in the subprime mortgage business.

Plagued by a spike in loan defaults and a loss of confidence among its financial patrons on Wall Street, New Century filed for Chapter 11 protection in Federal Bankruptcy Court in Wilmington, Del.

While the bankruptcy filing was expected — indeed it had been widely viewed as inevitable by analysts — the reverberations nonetheless will be felt for some time. As lenders and their banks contend with the financial and corporate fallout, policy makers in Washington are struggling to come to grips with how to help the more than one million subprime borrowers who are either in foreclosure or are more than three months behind on their house payments as of the end of last year.

The shakeout is winnowing out a clutch of fast-growing young companies that dominated the subprime business with the help of credit lines from Wall Street and access to borrowers through mortgage brokers. They are being replaced by larger companies like HSBC, Citigroup and Countrywide Financial for whom subprime is just one segment of a much larger portfolio.

“It’s definitely the end of an era,” said Guy Cecala, publisher of Inside Mortgage Finance, an industry newsletter.

Yesterday, New Century, which survived a similar credit squeeze nearly a decade ago that took out much of its competition, said it would dismiss 3,200 employees, or slightly more than half of its staff.

It also outlined a plan to liquidate itself over the next 45 days in auctions for its three principal assets: the platform it used to make home loans, the operation that serviced mortgages and the interest it held in pools of loans sold to investors.

“As deep into subprime as New Century was, there was just no way out,” said Matthew Howlett, an analyst with Fox-Pitt Kelton.

One of the two companies providing New Century with as much as $150 million in financing during the bankruptcy proceeding, Greenwich Capital Financial Products, has agreed to acquire certain loans and residual interests for $50 million. That offer could be bid up in an auction. The other company providing financing to New Century is the CIT Group/Business Credit Inc.

A sale of New Century’s servicing assets and platform to Carrington Capital Management for $139 million is planned; those operations collect loan payments, handle customer service, contact delinquent borrowers and oversee foreclosures. That sale is also subject to an auction.

Carrington’s involvement is expected to be closely scrutinized by New Century’s creditors, because the two companies have a long and close relationship. In 2004, New Century helped finance the creation of Carrington, which bought subprime mortgages from New Century and Fremont General and packaged them into bonds that were sold to investors.

New Century once owned a majority stake in Carrington, which is based in Greenwich, Conn., though its interest had dwindled to 7 percent as of the end of 2005.

Officials at Carrington did not return a phone call yesterday.

That leaves New Century’s mortgage origination business, which originated $60 billion in mortgages last year. The company was second only to HSBC Finance, the American mortgage division of the large London-based bank, in issuing subprime mortgages in 2006.

Still, New Century’s mortgage origination operation may attract few bidders, according to analysts because the business has not been accepting loans for the last three weeks and it is one of many similar businesses up for sale now.

Last month, Citadel Investment, a hedge fund, agreed to buy the mortgage origination business of ResMae for $22 million in a bankruptcy auction. H&R Block, the accounting and tax preparation firm, recently missed a self-imposed end-of-March deadline to sell its subprime mortgage business, Option One.

And yesterday, Barclays Capital, the London-based bank, said that it had closed its purchase of EquiFirst, a subprime mortgage lender, for $76 million, which is a third of the $225 million it agreed to pay in January.

“Frankly, I’m not sure the origination platform is worth anything right now,” said Christopher C. Brendler, an analyst with Stifel Nicolaus, “because of the name, and the fact that so much of the sales force, which dealt with the independent brokers, have already started to leave.”

Also, state regulators in California, New York and several other states have restricted New Century from making new loans because it was unable to close on thousands of mortgages when it ran into its liquidity squeeze.

In an indication that the company could get some relief from regulators, New Century said yesterday that it had disposed of all 27,000 loans it had in its pipeline when it stopped taking applications on March 12.

Given the precarious nature of the subprime mortgage business, it is unclear how much creditors will recover in the bankruptcy proceeding. The company’s filing yesterday did not provide details on how much money it owes other than to say it was more than $100 million.

Earlier, New Century said it owed $17.4 billion on credit lines from investment banks; most of those debts were secured by loans that New Century made with those funds. Many of those banks, which declared New Century in default in early March, began seizing the loans or auctioning them off in the last two weeks.

The results of those auctions, which have not been disclosed, would provide an important benchmark of what New Century’s assets and loan portfolios are worth, said Zach Gast, an analyst at the Center for Financial Research and Analysis. “The bids for the loans put up for auction will provide a pretty good estimate of how much debtholders will be hurt,” Mr. Gast said.

New Century is being advised by Lazard, the investment bank, and AlixPartners, a consulting firm. Its bankruptcy case is being handled by the law firm of O’Melveny & Myers.

“This was a very hard step for me personally and clearly not the outcome I would have preferred,” Brad A. Morrice, New Century’s president and chief executive and one of its three co-founders, said in a statement. “However, given the sudden and significant challenges facing our industry and New Century specifically, bankruptcy is the best means available to allow the company’s assets and operations to be sold through an orderly process.”

The bankruptcy proceeding, however, may not be the last word for some executives and board members at New Century. The company and its officials are the subject of two federal investigations and numerous class-action lawsuits.