Economy 'Downgraded' By Moodys

The economic woes of Ireland continue as a major credit rating company downgraded Ireland to Aa1 from AAA.

The company is the last of the three main agencies to strip Ireland of its top credit rating, after Standard & Poor's cut its rating last month to AA and Fitch downgraded Ireland by one notch to AA+.

A statement from the company said: "Moody's concluded that there was a case for only a moderate rating downgrade at this stage in light of the decisiveness of the policy response as well as the government's strong balance sheet position prior to the crisis."

Fine Gael's Finance Spokesman Richard Bruton said the cutting of Ireland’s credit rating spells higher costs for the Irish taxpayer.

"On current forecasts, 85% of income tax will be absorbed in interest payments by 2012," Mr Bruton said.

He added: "The huge black hole in the public finances created in recent years by Brian Cowen and Fianna Fáil means that public debt is rising at an alarming rate. What’s more, taxpayers will soon have to shoulder the debt involved in the operation of NAMA."

Meanwhile, new Central Statistics Office (CSO) figures show almost 12% of adults are now out of work, meaning Ireland now has the second highest unemployment rate in Europe.

(DW/BMcc)