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Thu 08 Aug 2010Poor, and not up to standard
WHEN IT rains, it pours. As if things were not bad enough in the market for Irish Government bonds, one of the world’s three major credit rating agencies decided to change its assessment of the State’s creditworthiness. Unsurprisingly, it was not a change for the better. The mounting costs of the banking rescue, it believes, mean that Ireland has moved one step further from the solid ground of solvency.
By Standard Poor’s (S&P’s) calculation, the State is now rated three notches below the top, triple-A ranking it enjoyed as recently as March 2009. This is not a catastrophe – six of 16 euro area countries are more negatively assessed by S&P – but it has consequences.
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