Markets are more focused on ECB than Kildare Street

Fears about a hung Dáil have been overcooked, and the reaction of Irish bond markets today to the prospect of a prolonged period of political uncertainty is expected to be muted, experts say.

During the election campaign, warnings had been made that the yields or costs of Irish borrowing would climb, if a government could not be agreed when the Dáil next meets on March 10.

The indecisive outcome of elections in Spain and Portugal late last year were blamed for pushing up the costs of borrowing for Madrid and Lisbon. The costs of borrowing for Portugal for ten years soared to over 4% after a new anti-austerity and centre-left government picked a fight with the European Commission about the timetable for closing its budget deficits.