Irish borrowing costs on markets fall after deal
Published 22/07/2011 | 10:55
Irish borrowing costs fell today following the Euro deal to save Greece and attempts to try to prevent contagion from its debt spreading to other countries.
The cost of borrowing fell to below 12pc on secondary markets from over 14pc recently although we are not planning to borrow on international markets until the end of next year.
The trend was similar for other troubled eurozone countries including Portugal, Italy, Spain and Greece.
However, the current rates being charged still make borrowing on open markets prohibitive.
European stock markets also gained on the news which will mean savings of €800m a year for us and longer repayment terms for our debts.
Frankfurt’s DAX index was 0.7pc and the CAC-40 in Paris was up 1pc.
The pan-European Stoxx Europe 600 index was up 0.6% at 272.20.
The euro, which had stammered when Asian markets opened earlier, regained its momentum in Europe to trade at $1.4427.
Analysts now believe a crisis has been averted but have warned there will also be challenges in the future.
"The most serious phase of the crisis to date has just passed, although further problems may return," said analysts at Royal Bank of Scotland.
"But for now, with further significant steps announced to back the periphery at the expense of the core, fear should subside for a time," they added.
Lloyds Bank's analysts agreed. "Does this [plan] adequately address the systemic risk?" they asked. "It's a step forward but huge execution risks remain so do not get carried away."