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Moody's cuts Irish debt rating to junk status
Moody's said it was increasingly likely that Ireland would need further rounds of official financing
Ratings agency Moody's has cut the Republic of Ireland's debt rating to junk status.
Moody's said its decision was based on the "growing possibility" that Ireland would need a second bail-out before it can return to capital markets.
The current European Union and International Monetary Fund support programme is due to end in late 2013.
It comes at a time when markets fear the debt crisis in the eurozone could spread to Italy and Spain.
Ireland, Greece and Portugal have all been downgraded by ratings agencies several times in recent months.
Last week, the European Commission raised the issue of the "appropriateness of behaviour" of agencies, and Greek Foreign Minister Stavros Lambrinidis said the agencies had exacerbated an already difficult situation.
In its latest downgrade, Moody's cut Ireland's ratings by one notch to Ba1 from Baa3.
And the agency warned that further downgrades were possible if the Irish government failed to meet its deficit reduction targets, or if Greece were to default, thereby causing further market disruption.
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Comment number 42.
phild13th July 2011 - 6:47
Through the last decade it was so obvious that Ireland was living way beyond its means this is no surprise. Just as with Greece the only surprise should be that they were allowed into the Euro at all. It doesn't have an economy to match most western European countries. They should now be left to sort out their own mess rather than depend on others. I just hope the UK is not bailing them out again.
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Comment number 33.
Blueyes213th July 2011 - 5:05
To win favour with the voters many european politicians for years spent money the country did not have this mix of low taxes and high spending could not last. Many European nations are now in effect broke and the people of these countries need to face up to this. There will be cuts, they will be large and painful. It is time the politicians told the truth to the people as there is not easy out.
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Comment number 17.
TopHatFox12th July 2011 - 23:59
Ireland have done exactly what the ECB and the IMF have told them, and they're still getting downgraded. The cure has been worse than the disease ever was.
If the Irish people want to escape a decade of more of the same, they need to remove the remove the government guarantee from the bonds of the failed banks. Investors need to learn- there should be no handouts for backing a failed business.
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