A front page reference in the Irish Independent to a piece of research from Barclays Capital warning of a potential rescue package by the International Monetary Fund sent the yield on the 10 year Irish bond rate soaring to a new record high above 6.5%.
The IMF felt obliged to come out and deny the likelihood of intervention with a spokesman commending the "assertive measures" taken by Ireland to deal with its banking crisis, saying: "We do not envision that IMF financing will be needed."
Assertive the Irish Government certainly has been as it has followed to the letter the IMF instructions to cut government spending to try and solve the budget deficit. Forecast general government spending this year at Euros 70.5 billion is 5 billion less than in 2009. Yet the policies of austerity are limiting growth with unemployment now up to 13.9 percent, consumer spending sliding with declining prices doing nothing to encourage a change.Like so many other countries in Europe the hope is that exports will get economic growth moving again but being tied in to the Euro has removed the easy way of doing that by devaluing the currency.