A small piece of good news
Published 22/09/2010 | 05:00
MOST people will be bemused by the "good news" that the National Treasury Management Agency succeeded in selling €1.5bn of bonds in a monthly auction yesterday and the "bad news" that the interest rate that the State must pay on those borrowings rose to a record high.
The high interest rates reflect the markets' attention to Ireland's twin problems of bank bailout and budget deficit.
Of the two, the budget deficit is by far the greater problem and, while the Government and the NTMA are rightly concerned about the steady upward trend in bond yields, its most immediate priority must be to reduce that deficit and be seen to be doing so.