Ireland’s debt rating will not be cut, says ratings agency

RATINGS agency Moody’s is not about to cut Ireland’s debt rating, a senior credit officer said yesterday, though the ratings agency is monitoring the new Irish government’s attempts to win easier terms for its loans under an EU/IMF rescue deal.

Moody’s cut Ireland’s rating by five notches to Baa1 in December and put the country on negative outlook, meaning more downgrades could follow, amid fears further bank losses will hit the public purse and further weaken economic growth prospects.

“The negative outlook reflects ... risks in the next 12 to 18 months. We are currently monitoring how things develop in Ireland and we will act when deemed appropriate,” Dietmar Hornung, vice president and senior credit officer at Moody’s, said.

Ireland agreed an €85bn (£73.3bn)?bailout with the EU and the IMF last year to try and resolve a prolonged banking crisis, but investors fear the deal will bankrupt the former Celtic Tiger economy.

Ireland’s Prime-Minister-in-waiting Enda Kenny is seeking better repayment terms on Dublin’s bailout package.

Kenny has less than three weeks to persuade Europe’s paymaster, Germany, to reduce the interest rate on the EU’s €40bn contribution and give Dublin more time to restructure its banks before a hoped-for EU-wide deal on the debt crisis is hammered out at a March 24-25 summit.