State borrowing cost ‘five times too high’

The cost of government borrowing compared to Germany is five times higher than it should be — given the strength of the economy — because of instability in the eurozone, according to the OECD.

The Organisation for Economic Co-operation and Development report paints a gloomy picture of the eurozone and global economy, saying there is little sign of a let up with Germany and the eurozone generally entering a technical recession and unemployment continuing to rise.

It offered no solution to the crisis other than applying more of the same remedies, cutting budget deficits and reforming labour and public services, despite showing that this feeds directly into rising unemployment in Ireland and other eurozone countries in the short term.