Somebody needs to get the Standard & Poors Monkey off of Ireland’s Back…
The ratings agency just cut Ireland’s credit rating for the second time in 3 months (now down to AA). The cost of the Emerald Isle’s banking disasters have S&P spooked and as a result, the credit default swaps that determine the cost for insuring the country’s debt widened sharply this morning.
How ugly is the Irish banking system? Put it this way…Ireland’s budget deficit is almost 10% of GDP. For perspective, this is triple the ratio that European Union rules permit. The country has had to pump almost $10 billion into it’s two biggest donnybrooking institutions, Allied Irish Bank and the Bank of Ireland.
The Celtic Tiger has now become the punching bag of the EU and the ratings agencies continue to take swings at it.
Who’s doing well in Europe? Get a load of Norway: Vikings Do It Better
Ireland CDS (FT Alphaville)