Merkel backs Ireland after junk status downgrade

GERMAN chancellor Angela Merkel rushed to Ireland’s defence yesterday after the bond downgrading to junk by Moody’s, while the move was described as incomprehensible by European Commission president Jose Manuel Barroso.

It was unclear last night if an emergency summit of EU leaders would be called in Brussels tomorrow to finalise a second aid programme for Greece and take further steps to stabilise the euro. But Taoiseach Enda Kenny warned that leaders would have to “grasp the nettle” to stop the contagion.

A spokesperson for Ms Merkel said Germany strongly backed the Irish government and had great confidence in Ireland’s reform programme.