Cost of borrowing could shoot up amid rating woes

THE cost of Ireland’s borrowing could shoot up early next year as the credit rating of the eurozone countries as a whole and the bailout fund we are reliant on are threatened with credit downgrades.

If the Government succeeds in returning to the markets in 2013, it could face a difficult time trying to borrow because of unprecedented demand by other countries, the OECD has warned.

Getting back to sustainable levels of debt depends on being able to borrow as cheaply as possible, and the Government is hoping that the bailout fund will provide a new long-term, cheaper loan to allow the state repay expensive money it borrowed to bail out the banks.