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Paschal Donohoe warns of 'bond market vigilantes' driving up borrowing costs

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Finance Minister Paschal Donohoe. Photo: Steve Humphreys

Finance Minister Paschal Donohoe. Photo: Steve Humphreys

Finance Minister Paschal Donohoe. Photo: Steve Humphreys

Bond markets could turn on Ireland with speed despite the current European Central Bank (ECB) supports and the ease for now of access to cheap debt, Paschal Donohoe warned yesterday.

He made the comments at an online seminar organised by the UCD Geary Institute for Public Policy - amid growing fears that emergency supports to the economy will have to be extended, potentially well beyond an initial cut-off date of June 12.

In heavily couched language, the minister raised the prospect of so-called 'bond market vigilantes' driving up borrowing costs for the State if investors baulk at the sharp rise in the deficit and national debt now under way.