The cost of borrowing for Ireland remained high this evening, though it came down slightly after the Government's announcement of its decision on Anglo Irish Bank.
The yield - or interest rate demanded by investors - on 10-year Irish bonds was still above 6% this evening, standing at just under 6.03%. The rate had hit 6.1% yesterday and had been just below that level earlier in the day.
Traders said the European Central Bank had been buying Irish bonds in small quantities yesterday to stop rates rising.
Bloxham economist Alan McQuaid says the markets believe the Government is trying to juggle too many balls at once - including spending cuts, dealing with Anglo and trying to generate enough growth to get the public finances back on track.
'It's simply impossible especially when it looks like US economic growth is starting to slow down again before the recovery has even got fully started,' he says in a note.
He says a European solution to the debt crisis is needed, adding that austerity measures should take place over a longer time than the 3-4 years being suggested by the European Commission.
'Asking for further fiscal austerity at a time when the economic recovery remains fragile is a recipe for disaster, and the bond markets know that,' he says.
Portugal raises over €1 billion in bond sale
Portugal successfully placed government bonds to raise a total of €1.039 billion today, but revealed it had to pay sharply increased rates even though the offers were oversubscribed.
Portugal is one of the euro zone countries being watched particularly closely on government debt markets, owing to concerns about how it can correct overstrained public finances while obtaining funding on the bond market.
