Ireland's credit rating reduced to junk

13 July 2011

Ireland has seen its credit rating reduced to junk and may be likely to require a second bailout, it has been claimed.

Moody's Investors Service cut the figure after claiming possible measures to aid the debt crisis in Greece could have a negative effect on Ireland.

The proposals may serve to increase the chances that the country will default on some of its debts if it is required to ask for another bailout from Europe.

Ireland's finance ministry described the news as a "disappointing development" and claimed the downgrade goes against what other ratings agencies are projecting.

"We are doing all that we can to put our house in order and the progress that we are making is there for all to see," it added.

The move comes shortly after Moody's recently slashed the credit rating of Portugal to junk by reducing it to a grade Ba2 - a reduction of four notches.

By Claire Archer

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