"Ireland’s slide continues as Moody’s downgrades its credit rating" by Matthew Saltmarsh, International Herald Tribune | July 20, 2010
The New York Times' international edition.
PARIS — Ireland’s efforts to pull out of a deep economic slump suffered a setback yesterday when a major credit agency downgraded the country’s bond rating, citing a weak banking system and rising debt.
Moody’s Investors Service downgraded Ireland one notch, to Aa2 from Aa1, although it remains comfortably above junk level. Moody’s also changed the outlook on the ratings to stable from negative.
“Today’s downgrade is primarily driven by the Irish government’s gradual but significant loss of financial strength, as reflected by its deteriorating debt affordability,’’ said Dietmar Hornung, a senior credit officer at Moody’s.
Then don't take on any more.
The agency also said that the downgrade had been driven by the increased burden in liability for banks after a series of recapitalization measures led by the state....
Translation: The BAILOUTS FAILED!
A test of investor confidence in the government will come today when Ireland plans to sell up to $2 billion worth of bonds maturing in 2016 and 2020.
Yes, THEY matter more than YOU, citizens of Ireland.
In a sense the near-term pressure is off. The government does not face any redemptions of benchmark bonds this year, and it has raised sufficient money to last until the first quarter of 2011, regardless of the outcome of coming sales, according to analysts.
Once one of the fastest-growing economies in Europe, Ireland has suffered a dramatic turnaround in recent years as the removal of easy credit and a crash in home prices hurt consumer confidence.
The economy shrank 7.1 percent last year, causing a steep decline in tax revenue....
The budget went from surpluses in 2006 and 2007 to a staggering deficit of 14.3 percent of GDP last year — worse than the deficit in Greece. It continues to deteriorate. Joblessness in the country of 4.5 million is now above 13 percent.
I would be pretty pissed, too!!!
In response to the rising deficit, Irish politicians have raised taxes and cut salaries for public workers by as much as 20 percent.
That also makes people angry -- especially when they know where the money is going.
They have also thrown money into the country’s main lenders to prevent bank failures.
And YOU must pay for it, taxpayers of Ireland -- even though YOU had nothing to do with the looting and did not benefit.
--more--"
Also see: Catholic Courtship in Ireland
The kids must be busy, huh?
