Our bonds best since bailout

IRELAND'S bond yields have fallen below 5pc for the first time since the bailout in November 2010.

The debt in Ireland is the second-best performing in the euro area this year, trailing only Portugal.

Analysts and investors welcomed the moves towards stricter budget spending in Ireland.

Alberto Gallo, head of European credit research at Royal Bank of Scotland Group in London said: "Ireland is making good progress on reform and fiscal measures."

And Michael Cummins, of Dublin-based Glas Securities, said that sentiment has changed a lot since July.

"The July summit indicated Ireland would get some sort of additional relief," he said. "This combined with the ECB bond-buying plan has led to increased demand."

Eurozone leaders' decision in June to look at easing Ireland's bank debt has caused a flurry of activity and allowed Dublin to push out debt repayments over a longer time horizon.

However, there was caution that these gains for investors are not necessarily an indication of a clear path ahead.

Michael Saunders, Citigroup's head of European economics in London, said that any optimism that Ireland can raise money in the markets and avoid a debt restructuring is premature.

"Ireland faces an almost impossible task to get back to fiscal balance," he said.

Mr Saunders added that a slower economic revival may eventually make Ireland's debt unsustainable.