Pressure on Ireland as investors dump bonds

[November 04, 2010]  DUBLIN (AP) -- Ireland's finances are coming under more pressure in advance of the government's latest plans to get out of its debt crisis.

In photo at left, Ireland's Health Minister Mary Harney was pelted with a paint-filled balloon during the opening of a new mental health facility as tempers grow over government plans to slash euro1 billion (U.S. $1.4 billion) from the costs of running an overloaded hospital network. (AP photo by Niall Carson)

Interest rates on the country's 10-year bonds have reached a new euro-era high of 7.6 percent as investors dump Irish treasuries in advance of announcement of deficit-cutting plans and growth forecasts.

The bond sell-off reflects skepticism that Ireland can reverse its huge budget deficit without driving its economy deeper into recession.

The interest-rate premium demanded by investors to buy Ireland's depreciating bonds has doubled in two months.

The 10-year yield rose to 7.62 percent Thursday, breaking a day-old record of 7.45 percent.

Later Thursday, Irish Finance Minister Brian Lenihan plans to unveil growth forecasts for 2011-2014 and the planned size of spending cuts and tax increases in 2011.

[Associated Press]

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