Opening Bell: ESRI says 'no tax cuts', Michael Noonan defends USC plans, Aerie eyes Irish plant

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The Economic and Social Research Institute (ESRI) has warned that tax cuts in Budget 2017 could potentially overheat the economy.

In its quarterly commentary, the ESRI is calling for the Department of Finance to deliver a fiscally neutral budget next month.

The think tank has said that the economy is now running close to its full potential, with rising levels of personal consumption and retail sales combining with an acceleration in employment growth to mean that no further stimulation is required in its eyes.

The ESRI has reduced its growth projections for this year to 4.3% and to 3.8% next year, on foot of weaknesses in the Chinese economy and Brexit-related issues.

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Minister for Finance Michael Noonan has reaffirmed his commitment to phasing out the universal social charge (USC), saying that it is a "valid fiscal approach" that has cross-party support.

He told the Oireachtas Committee on Budgetary Oversight that the tax had been an emergency measure during the recession and that, now the economy has stabilised, it should be removed gradually.

This removal should take at least five budgetary cycles, up to 2021, according to the minister.

The USC currently generates €4 billion in tax for the Exchequer, representing close to a quarter of the total personal tax yield.

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US pharma firm Aerie has earmarked proceeds from the $125 million it has raised in stock market sales for the construction of an Irish manufacturing facility.

The plant is expected to serve the $1bn company's international and US markets, the Irish Independent reports.

Aerie moved its intellectual property to Irish shores early last year, and its planned manufacturing plant will form part of its broader supply chain strategy.

Aerie Pharmaceuticals deals with the discovery, development and commercialisation of therapies used in the treatment of glaucoma and other eye diseases.

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The EU leader preparing to chair Brexit negotiations has told Sky News that the UK is "between a rock and a hard place" and will be offered an "inferior" trade deal.

Joseph Muscat, the Prime Minister of Malta, revealed that he had told British Prime Minister Theresa May:

"Most of my colleagues want a fair deal for both the UK and Europe, but it has to be a deal that is inferior to membership, so you can't have the cake and eat it.

"I don't see a situation where Britain will be better off at the end of the deal."

Dr Muscat's comments on the sidelines of the UN General Assembly in New York are significant because Malta is the set to hold the rotating EU presidency, meaning it will chair the initial Brexit negotiations if May triggers Article 50 early next year.

Additional reporting by IRN