For a few days after the Irish Government saw a €1.5 billion bond issue snapped up last week there was a brief moment of optimism that the worst might be over for a country hard hit by the fallout from the global economic crisis. The much higher interest rate that investors were demanding from Ireland compared with major European nations eased a little bit. Alas, it has proved to be a false dawn.
The yield on 10 year Irish bonds has kicked up again as doubts quickly returned about the cost to the Government budget of bailing out Irish banks. The final cost of saving the largest of those banks is expected to be revealed later this week.