IRELAND has joined an elite group of countries that are effectively being paid to borrow money.
Four years after being frozen out of the bond markets, we now find ourselves in the strange position where yields have gone negative on the international money markets for short-term debt.
It is the first time in our history that borrowing costs for the State have dipped below zero.
Effectively, this means that if investors were to buy Irish government bonds today, they could get less back when the debt is repaid in two years than they originally paid.
The news means it will be even cheaper for the Government to borrow abroad and reflects Ireland's new-found status as an economic safe haven.
Our borrowing costs are now lower than economic superpowers such as the US and Britain.
Alan McQuaid, economist with Merrion Stockbrokers, described the situation as farcical and said it reflected the uncertainty that existed in the money markets.
"Investors are essentially paying governments to hold their money," he said.
It comes a day after the ECB cut its interest rates to a record low and made it more expensive for banks to hold money on account.
Finance Minister Michael Noonan said that Thursday's ECB rate cuts would be good for construction and exports.
He again signalled that he has scope to limit cutbacks in next month's Budget.
Two-year rates are also negative in Austria, Belgium, Finland, France, Germany and the Netherlands, as well as non-euro nations Denmark and Switzerland.
Stephen Kinsella, economics professor at the University of Limerick said the markets were acting in an irrational manner.
Speaking in Limerick, Finance Minister Michael Noonan welcomed Thursday's decision from Frankfurt describing it as "good news" for the Irish economy.
"The Central Bank cutting the interest rates helps us to continue the export drive," he said.
"What was announced in Frankfurt brings down the exchange rate, when the exchange rate goes down our exports are more affordable so we export more," he said.
Mr Noonan said Foreign Direct Investment alone will not rescue the country and said the construction and retail industries are also picking up.
He refused to be drawn on how he plans to ease the burden for middle income earners in the upcoming budget.
When asked about what taxpayers can expect in the budget he said: "I can give them the hope that the expectation that we have to take another €2bn in cutting expenditure and raising taxes, that's moving off the agenda.
"We won't have to do a lot now because we got a lot of extra taxes in, but if we have any tax relief it will have to be paid for elsewhere in the system but there's nothing unusual about that.
"When I reduced the VAT rate from 13.5pc to 9pc it had to be paid for as well and when I brought in the tax relief for home extensions that had to be paid for aswell. I'm not going to announce the Budget today."
Mr Noonan made his comment at a jobs announcement by the Kirby Group in Limerick.
The Irish engineering services contractor is creating 30 jobs which it plans to fill immediately.
Mr Noonan is preparing the Budget against a backdrop of positive economic data at home.
Unemployment has dipped to below the eurozone average and the public finances are €971m ahead of target.
The country's services and manufacturing sectors are performing well and reaching multi-year highs, while estimates have put Ireland's economy growing as high as 3pc this year.
By contrast, growth in the eurozone stagnated in the second quarter, with Italy slipping back into recession.
Eurozone growth was flat between April and June against the previous three months despite growing household consumption and a positive contribution from trade, data showed yesterday. The European Union's Statistics Office confirmed its earlier estimate that the output of the 18-member bloc was unchanged.
The euro was deep under water yesterday having suffered its steepest daily fall in three years after the ECB move.