Ireland's cost of borrowing climbed on bond markets this afternoon, in line with that of other heavily-indebted euro zone countries such as Greece and Portugal.
This evening the interest rate demanded by investors to lend money to Ireland for 10 years was around 6.9%, compared with around 6.5% yesterday. The rate was around 6% at the beginning of last week. Ireland does not plan to return to the bond markets until early next year.
Analysts said the latest rise was partly due to some recent negative figures from the Greek economy, as well as fresh worries about Portugal's plans to cut its deficit.
Earlier, budget talks between Portugal's Socialist government and the main opposition party ended without a deal, raising the risk of a political and financial crisis in one of the euro zone's weakest members.
Lacking a majority in parliament, the government of Prime Minister Jose Socrates needs the opposition Social Democrats (PSD) to support, or at least not to oppose, its budget bill to ensure passage. The PSD has yet to make its position clear.
The two sides have been at loggerheads over how to cut Portugal's swollen deficit, with the PSD insisting that spending cuts should have priority and the government preferring a more balanced approach that includes tax hikes.
Meanwhile, the Greek finance minister George Papaconstantinou said today that the country's 2009 budget deficit would be set 'once and for all' at above 15% of GDP.
Mr Papaconstantinou said the EU's statistics office would set the much-revised deficit at five times initial estimates - a level that did not surprise economists but which showed the scale of the task to fix Greece's broken finances.
Greece's 2011 draft budget earlier this month estimated the 2009 deficit at 13.8% of GDP but Eurostat is expected to revise the deficit upwards in mid-November.
Mr Papaconstantinou also said Greece's economy would shrink by between 2.5% and 3% next year. In the 2011 draft budget, published earlier this month, the government estimated that GDP would shrink by 2.6% next year as an austerity drive takes its toll.
