Belfast Telegraph

Time running out for Republic as it stares into the abyss

Another day, another move towards the chasm for Ireland, a country the markets are slowly but surely dragging towards the brink.

The yield on 10-year Irish government bonds is now at 8.7%, some six percentage points more than Germany, a fellow member of the European single currency.

Of itself, that figure means little to Ireland, which is not in the position of needing to refinance its debts today. But it is an indicator of investors' views of the country. It is the market's assessment of all of the gossip and speculation about International Monetary Fund or EU bailouts being just around the corner.

What's striking, however, is that there is very little new news driving this sudden lurch towards the abyss. Olli Rehn, the EU's Economic Affairs Commissioner, was in Ireland this week and says he believes the country's plans to reduce the deficit are credible - and that market confidence will improve once the Irish government publishes its four-year fiscal plan, which is due within weeks.

Moreover, the cuts already promised are so far being delivered and tax revenues are coming in slightly ahead of expectations.

So why the panic? Above all, the power of the market is conspiring against Ireland. Investors have turned against the country - winning them back will be rather like turning an oil tanker: slow and difficult.

And there isn't much time left.