Belfast Telegraph

Government bonds raise 1.5bn euro

The raising of 1.5 billion euro from international investors to cope with the national debt has been described as an enormous relief for the country.

But taxpayers were also warned they will bear the brunt of the rising cost of borrowing money to plug the massive hole in the state coffers.

The National Treasury Management Agency (NTMA), which is charged with managing the national debt, raised the money through an auction of so-called Government bonds.

These are effectively IOUs from the state and the taxpayer will have to cover the interest owed on the borrowings.

While nerves were settled by the huge demand for the bonds, the high interest rates demanded reflect continued international concerns about the country's ability to repay its bills.

Oliver Whelan, the NTMA's director of funding and debt management, said the auction has raised enough money to see the country though the first half of next year.

"We are very pleased to have achieved our stated objective of raising 20 billion euro from the bond markets in 2010," he said.

"And we note that investor demand has remained firm even in the current difficult market conditions as evidenced by the fact that we received bids for 3.6 times the amount on offer."

Fine Gael's Leo Varadkar branded the auction a success but warned the cost of borrowing for Ireland had soared.

"It's a relief for Ireland's families and businesses to see the NTMA being able to raise the funding required," he said.

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