European credit rating agency IBCA has confirmed Ireland's long term foreign currency rating of AA+. The agency pointed to rapid growth, low inflation, a substantial surplus on the balance of payments, fiscal restraint and a reliable supply of skilled labour as support for the high rating.

IBCA also notes that Ireland should be able to cope with the cut in EU funding expected in the next century, although it notes that some cuts in public spending may be required.

In addition, the agency considers that Ireland will "certainly join" monetary union at the outset. It adds that Ireland will benefit from joining even with the UK remaining on the sidelines. However, it also points out that the pound will lose the flexibility to move between the deutschmark and sterling which has proven useful in recent years.

IBCA also points to some inroads being made into the ranks of the unemployed and the downward trend in Irish debt as positive support for the rating.

The AA+ rating also applies to the £9 billion of unsecured sovereign external debt issues and sets a ceiling for other Irish issuers including major corporates and the banks.

The agency has also confirmed its rating of A1+ for short-term issues and a long-term local currency rating of AAA.

Standard & Poors last rated Ireland an AA for foreign currency, while Moody's increased its rating last February to Aa1.