Irish Republic debt downgraded by Moody's

  Government support of the Republic of Ireland's banks was a major reason for the bail-out The Republic of Ireland's credit rating has been cut again due to concern that weak economic growth will affect its ability to pay back its debts. The credit rating agency Moody's has marked the country down two notches on the scale to a status just one notch from "junk".
Such a move typically means that the government will have to pay more to borrowing money.
Meanwhile, the country is seeking approval for deficit cutting plans.
It needs the European Union to sign off any moves to cut spending and raise funds as a condition of its giant bail-out package which was granted earlier this year.
The EU and the International Monetary Fund gave 85bn euros (£70bn, $113bn) in support for the country when it could no longer cope with its debts, largely the result of support for its over-stretched banking sector.
The bail-out came with strict conditions, which the newly elected government said were too tough to meet.
Moody's cut the Republic's credit score on Friday to Baa3 - one level above junk-bond status - saying it could struggle to cut its budget deficit because of weaker-than-expected economic growth.
It stands alone though among the three leading ratings agencies. On Thursday Fitch ratings upgraded its outlook, while Standard and Poor's gives the Republic the same grade as Fitch.
The government is expected to announce a revised agreement with the European Commission, the European Central Bank and the IMF on terms of Ireland's bail-out agreement.
Some changes are expected, including a reversal of the recent cut in the minimum wage.
However, the lenders are keen to send a signal that the country must get its finances in order, and are likely to stress that the Irish Republic must stick with spending cuts to qualify for continued funding.
It has a target to cut the gap between government income and spending to 3% of gross domestic product by 2015.
The Republic's 2010 deficit hit a European record of 32% after it bailed out its crippled banks.

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Irish Republic debt downgraded by Moody's

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