Moody's Cuts Ireland's Govt Bond Rating to Junk

After Greece, Ireland might become the second euro zone member to need a second bailout. File photo

Moody's Investors Service has downgraded Ireland's government bond ratings to junk over growing fears the country previously known as the "Celtic tiger" might need a second international bailout.

After it already did so with Portugal last week, another of the euro zone members in trouble, Moody's has cut Ireland's rating by one notch to Ba1 from Baa3 and kept a negative outlook.

The downgrade has been motivated by the risk that Ireland will need a second bailout that can affect private investors. In 2010, Ireland got an EUR 85 B bailout package from the EU and the IMF, becoming the second euro zone member to do so after Greece and before Portugal.

The European Commission has immediately reacted with criticism to the downgrade, saying "it contrasts very much with the recent data, which support a return to GDP growth this year, and the determined implementation of the (bailout) program by the Irish government."

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