Sunday 11 December 2016

Ridiculous debt at what cost?

Published 13/08/2010 | 05:00

THE cost of Ireland's borrowing has risen to a level which the governor of the Central Bank has described as "ridiculous". Professor Honohan may dismiss bond jitters as a spasm by nervous, overly sensitive markets, but it is still a matter of huge concern and, by early next week, we will know just how serious the situation is.

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As we all know, the country is deeply dependent on borrowing. The phrase "€55m a day" has become tediously familiar, but it remains a stubborn reality.

The interest rate that the Government pays for these borrowings has risen slowly but steadily for weeks now, and yesterday, the bond spread -- that is, the gap between our rising cost and Germany's extremely low cost of borrowing -- rose to its highest level in a month.

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