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.
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.