Ireland's cost of borrowing rose again today as bond markets remained on edge ahead of the Government's expected announcement of the final cost of bailing out Anglo Irish Bank.
The interest rate demanded by investors to lend money to Ireland for 10 years was around 6.95% this evening.
The gap, or spread, between this rate and the equivalent German rate reached a euro lifetime high of 4.75 points earlier in the day. The cost of borrowing for Portugal also surged this morning.
The premium demanded by investors to lend to Ireland over Germany narrowed slightly after reports that the European Central Bank had been buying Irish Government bonds in the market.
Commenting on the bond markets, Taoiseach Brian Cowen said the country needed to be upfront and transparent about the level of losses it was facing. He also pointed out that the National Treasury Management Agency had confirmed that Ireland was funded up to the middle of next year.
Ireland and Portugal are both struggling to control huge public debts and deficits. Earlier, the cost of insuring Irish sovereign debt against default hit a record high of 5.19 percentage points.
Emergency funding 'not being considered'
A European Commission spokesman has said euro zone emergency funding for Ireland is not being considered.
Amadeu Altafaj was asked if there was a chance that Ireland would tap the euro zone's €440 billion emergency fund, the European Financial Stability Facility (EFSF) set up to help euro zone members who have problems financing themselves on the market.
'The issue is not being considered,' he said. He added the Commission was confident that Ireland would do what was necessary to retain market confidence.
A senior euro zone source quoted by the Reuters news agency, asked if Ireland has been testing the waters to use the EFSF borrowing vehicle or held any informal talks on the subject said: 'Definitely not'.
Meanwhile, ratings agency Standard and Poor's has said the the final bill for Anglo Irish Bank is getting closer to its estimate of €35 billion. It warned that it could still exceed that figure.
Should this happen, S&P analyst Trevor Cullinan said that another downgrade of Ireland's rating was possible. The S&P analyst's comments are part of a Prime Time programme to be broadcast tonight.
The full interview with Trevor Cullinan will be broadcast tonight on Prime Time.
