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Ireland faces further credit rating cut

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Ireland faces further credit rating cut

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Ireland’s credit rating could be cut again because of the rising cost of recapitalising nationalised Anglo Irish Bank.

That warning has come from rating agencies Standard & Poor’s and Fitch.

Credit agency Moody’s this week slashed its ratings on Anglo Irish’s lower-grade debt.

Dublin is having difficulty convincing investors that it can prop up its ailing banks and cut the biggest budget deficit in the European Union.

That has pushed up the cost of borrowing to the government to record levels.

The 25 billion euros of aid so far earmarked for Anglo Irish would already push Ireland’s 2010 budget deficit to around 25 percent of gross domestic product, compared with an EU limit of three percent that the government aims to reach by 2014.

Experts say the final cost could be between 30 and 35 billion euros.