IRELAND'S sovereign debt rating could be slashed to junk after Portugal was downgraded by Moody's.
Although Ireland has managed to maintain its status so far, there are contagion risks highlighted by the latest rating move against Portugal, Moody's fear.
Moody's currently has Ireland at Baa3 with a negative outlook, which is the lowest investment grade rating and just one notch above "junk" status. Fitch and Standard and Poor's have the sovereign debt rated marginally higher at BBB+.
However, credit rating agencies are being investigated by the EU, as they are suspected of having conflicts of interest. There are fears that the timing of their downgrading of euro area countries is choreographed to suit some of their clients, the EU said.
European Commission president Jose Manuel Barroso, above, has accused Moody's of downgrading Portugal without having the facts of the country's situation and "adding another speculative element to the situation".