Fears see Irish bond sell-off

IRELAND came under renewed pressure yesterday as investors remained wary of buying Irish assets after Germany stood firm on its call for bondholders to bear a share of the cost should Dublin need a bailout.

The premium investors demanded to hold Irish debt over benchmark German bunds hit new highs extending a month-long climb that has seen Irish borrowing costs repeatedly break records with the yield on Irish 10-year bonds hitting eight per cent for the first time yesterday.

European Union (EU) economics commissioner Olli Rehn moved to reassure investors during a two-day visit to Ireland saying he had not discussed any need for an EU bailout, adding he believed market confidence would be restored once the country published its four-year plan to cut debt.

“Ireland has not requested the activation of any European financial backstops, we have not discussed this matter this evening. We have discussed the four-year fiscal plan and the next year’s budget,” Rehn told a news conference

The Irish emergency budget will be published on 7 December with a pre-Budget report due this week pushed back to later this month by Irish finance minister Brian Lenihan.