Joe Brennan and Dara Doyle
Nov 22, 2010
Ireland became the second euro country to seek a rescue as the cost of saving its banks threatened a rerun of the Greek debt crisis that destabilized the currency.
The euro erased gains and Irish bonds pared an early advance after Moody’s Investors Service said a “ multi-notch” downgrade in Ireland’s Aa2 credit rating was “most likely.” The prospect of January elections loomed as the Green Party said it would pull out of Prime Minister Brian Cowen ’s coalition.
A package that Goldman Sachs Group Inc. estimates may total 95 billion euros ($130 billion) failed to damp speculation that Portugal and Spain would need to tap the emergency fund set up by the European Union and International Monetary Fund after the Greece rescue.
“It probably won’t halt contagion. The sovereign crisis isn’t yet over,” said Sylvain Broyer , chief euro-region economist at Natixis in Frankfurt. “Ireland is in the middle of a difficult crisis.”