Portugal downgrade raises fresh concerns over Ireland

http://www.irishtimes.com/newspaper/breaking/2011/0707/breaking6.html

The Government's effort to rebuild investor confidence faces a new threat after a big rating downgrade on Portugal raised fears that Ireland could be next, making a return to private markets more difficult.

The Moody’s downgrade on Portugal, heavily criticised by EU leaders, led to a new spike in notional Irish borrowing costs as fresh doubt was cast over the effort to bring the sovereign debt crisis under control.

Although Moody’s insisted last night that it continues to “differentiate significantly” between the weakest euro zone countries, analysts in Dublin said Ireland was likely to be the next country to see its sovereign debt rating downgraded to “junk” status.

Speaking this morning, however, Minister for Public Expenditure Brendan Howlin told Newstalk the Government believed Ireland will return to the debt markets by the end of next year despite rising bond yields.

K&R, tragically.