The cost of borrowing for Ireland has begun to escalate following renewed fears about Greece.

The development comes as reports from Spain suggest customers of its fourth largest bank withdrew €1 billion over the past week.

The cost of borrowing for Ireland had been relatively shock resistant to bad news about Greece over the past three months.

The interest rate on bonds had remained at or below 7%.

But the new wave of uncertainty about Greece remaining in the euro has changed that.

The cost of borrowing hit 7.5% this morning.

At the same time there have been further worries about Spain.

Newspaper El Mundo reported the country's fourth largest bank had suffered withdrawals of one billion euro over the past week.

And on the bond market Madrid has had to pay higher rates to raise money this morning.