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.

WAGES and prices need to fall by a further 10% to make the economy more competitive but even with these cuts the unemployment rate will hover between 7% and 8%, according to Bloxham Stockbrokers.

ONE-in-five people expect the economy to improve in the next six months as a poll shows consumers are beginning to perk up.

MANUFACTURING output could be higher this year than in 2008 but it is being driven by multinationals while home-based industries struggle.