Bloomberg is reporting Moody's will downgrade France:
France risks losing its top AAA grade as Europe’s debt crisis prompts a wave of downgrades that threatens to engulf the region’s highest-rated borrowers, with Belgium also facing a possible cut, analysts and investors said.
Ireland earlier was downgraded 5 credit rating levels to Baa1.
The bailout would be in the tens of billions of euros, he said, adding that the final figure was subject to negotiations. Analysts and politicians have suggested that the size of the package may well approach €80 billion, or $109 billion.
Perhaps €15 billion would be set aside in a fund to support the country’s banks, which have been hemorrhaging deposits. An additional €60 billion or so would be allocated to Ireland itself so as to give it the flexibility of staying out of the bond markets.
Negotiations for the terms are not finalized but the New York Times implies the deal will have Greek like austerity measures. Bend over Ireland.
Mr. Cowen has said Ireland is already putting an adequate budget-cutting plan in place, but given the size of the bailout being discussed, it would be surprising if E.U. and I.M.F. officials did not demand more cuts, accompanied by tax increases.
“There will be a lot of pain for the taxpayer and a lot of people will lose their jobs,” said Michael Noonan, the chief economic spokesman for Fine Gael, the main opposition party.
WHEN I wrote in The Irish Times last May showing how the bank guarantee would lead to national insolvency, I did not expect the financial collapse to be anywhere near as swift or as deep as has now occurred. During September, the Irish Republic quietly ceased to exist as an autonomous fiscal entity, and became a ward of the European Central Bank.
Morgan Kelly is an Irish Economist who is predicting an 80% drop in Ireland home prices. He estimates their own bank bail out is sinking their nation:
This €70 billion bill for the banks dwarfs the €15 billion in spending cuts now agonised over, and reduces the necessary cuts in Government spending to an exercise in futility. What is the point of rearranging the spending deckchairs, when the iceberg of bank losses is going to sink us anyway?
What is driving our bond yields to record levels is not the Government deficit, but the bank bailout. Without the banks, our national debt could be stabilised in four years at a level not much worse than where France, with its triple A rating in the bond markets, is now.
While the world breathes a sigh of relief that Moody's didn't join Fitch and S&P in downgrading Greece debt to junk, trouble is brewing elsewhere.
For instance, Latvia's budget situation is reaching crisis levels again.
Latvia's constitutional court Monday struck down pension cuts that form a key plank of an austerity drive, casting doubt on a crucial IMF and EU-led bailout for the recession-hit Baltic state.
Bailout legislation protecting domestic deposits in Irish national banks was signed into law by President Mary McAleese at 3:30 PM (Irish time).
President Mary McAleese has this evening signed legislation giving effect to the Government's €420 billion bank guarantee scheme.
A single-line statement from Áras an Uachtaráin just after 3.30pm said Mrs McAleese had signed the Credit Institutions (Financial Support) Bill 2008 into law.
Unlike the US FDIC or the British Financial Services Compensation Scheme, Ireland has had, until today, a deposit insurance scheme to protect only something like the first €20,000 deposited by individuals into banks.
It seems Ireland is basically insolvent. All hail the banks.
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