The difference between Ireland's cost of borrowing and that of Germany rose to a new high on bond markets today.
The yield - or interest rate demanded by investors - on 10-year Irish bonds went above 6.1% at one point this morning. This was almost 3.85 percentage points above the equivalent German rate. The 10-year yield was 6.06% by this evening.
The Taoiseach described today's movements as part of the 'ebbs and flows' of bond markets.
Renewed concerns about the amount of debt governments have taken on, and a Wall Street Journal article casting doubt on the accuracy of last month's European bank stress tests, have led investors to flee bonds issued by Greece, Portugal and Ireland.
The focus on the cost of Anglo Irish Bank is also weighing particularly heavily on Irish Government bonds.
The National Treasury Management Agency is going ahead with a sale of more short-term Irish debt on Thursday.
Government 'not told Anglo insolvent'
The Taoiseach has described today's movements on the bond markets as part of the 'ebbs and flows' which have been a feature of the markets in recent months. Brian Cowen said Ireland was recognised internationally as keeping to its budgetary strategy.
Asked about last nights Freefall programme on RTE, Mr Cowen said the Government had not been given a presentation on the night of the bank guarantee suggesting that the liabilities of Anglo Irish Bank exceeded its assets.
The programme revealed that Anglo Irish Bank asked to be taken over by Bank of Ireland on the same day the Government met to decide on the introduction of the guarantee. It said then chairman Sean FitzPatrick and chief executive David Drumm told a meeting with Bank of Ireland chiefs that Anglo was facing insolvency.
Meanwhile, Labour MEP Alan Kelly has said the EU Competition Commissioner has no proposal from the government on the future of Anglo. He was speaking following a meeting with Joaquin Almunia in Strasbourg this afternoon.
The Labour MEP said that he was surprised that at this stage Commissioner Almunia had nothing to authorise or adjudicate on. He said that the Commissioner assured him that he would make a speedy decision on receipt of a proposal from the Government.
