Shot across the Irish government bow from interest rates

[patslatt]

The Daily Telegraph Recession hits Europe as Club Med debt worries grow - Telegraph notes that the interest rate spreads have rocketed between German EU bonds and those of "Club Med" countries perceived to have weak control of their state finances: Italy suffers from a 1.26% spread or 126 basis points in the jargon,Greece 157 bp and Portugal 90 bp.

By comparison,"They have reached 109bp for Ireland,reflecting concerns over Dublin's ability to guarantee its outsize banks."

This will have severe financial consequences for Ireland, as the additional cost of financing for every billion of debt because of the spread alone will be nearly 11 million a year or nearly 327 million over 30 years. It is a warning to the government to get its budgetary act together.

[seabhcan]

The Daily Telegraph Recession hits Europe as Club Med debt worries grow - Telegraph notes that the interest rate spreads have rocketed between German EU bonds and those of "Club Med" countries perceived to have weak control of their state finances: Italy suffers from a 1.26% spread or 126 basis points in the jargon,Greece 157 bp and Portugal 90 bp.

By comparison,"They have reached 109bp for Ireland,reflecting concerns over Dublin's ability to guarantee its outsize banks."

This will have severe financial consequences for Ireland, as the cost of financing for every billion of debt because of the spread alone will be nearly 11 million a year or nearly 327 million over 30 years. It is a warning to the government to get its budgetary act together.

We still have a lower rate than the UK.

[youngdan]

I see on the RTE website that Ireland has successfully sold a 4 billion euro bond which is some achievement to my mind. It is a percent above bunds and for 3 years. Was this an open auction or some sort of private deal.

[droghedasouth]

We still have a lower rate than the UK.

Wrong.

According to Bloomberg, 10 year rates are currently:
USA 3.87%
UK 4.48%
Germany 3.80%

Todays Irish Independent says that out 10 year benchmark rate is now 4.82%

UK rates already reflect the departure from prudence, golden rules etc. by the Brown/Darling government.

We are 0.34% above the UK rate because of our fkucing stupid government.

[Victor Meldrew]

We are 0.34% above the UK rate because of our fkucing stupid government.

On a related note,

What was priceless was Lenihan saying that in part the mess Ireland was in down to the EU giving low interest rates which fueled our property bubble.

For me that's like an alcoholic complaining that there is a special on Dutch Gold in Tesco......

Lets face it, FF look more cretinous by the day, and never fail to find a new low

[drbob1972]

Lets face it, FF look more cretinous by the day, and never fail to find a new low

the depressing thing is that they seem hell bent on dragging the rest of us down with them.

[Question R24U]

Wrong.

According to Bloomberg, 10 year rates are currently:
USA 3.87%
UK 4.48%
Germany 3.80%

Todays Irish Independent says that out 10 year benchmark rate is now 4.82%

UK rates already reflect the departure from prudence, golden rules etc. by the Brown/Darling government.

We are 0.34% above the UK rate because of our fkucing stupid government.

Pleas excuse my ignorance but at a time of high inflation eroding our competitiveness and the need for capitalisation of the banks: is that not a good thing?

[Vega1447]

Pleas excuse my ignorance but at a time of high inflation eroding our competitiveness and the need for capitalisation of the banks: is that not a good thing?

I don't think so - this means (if I understand correctly) that Irish Govt is perceived as a riskier borrower and so has to pay higher interest on its (our) debt.