Ireland’s financial troubles loomed large Wednesday as investors – betting that the country soon could join Greece in seeking an EU bailout – drove the interest rate on the country’s 10-year borrowing to a new high.
The yield on 10-year bonds rose above 8 percent for the first time since the launch of the euro, the European Union’s common currency, 11 years ago.
The cost of funding Irish debt has risen steadily since September, when the government admitted its bailout efforts of five banks would cost at least euro45 billion, equivalent to euro10,000 for every man, woman and child in Ireland. That gargantuan bill, in turn, has made the projected 2010 deficit rise to 32 percent of GDP, the highest in post-war Europe.
Some twenty or so years ago when I took over my first parish as pastor the sacristan showed me around the presbytery (ie rectory). He demonstrated the mini-safe disguised as a light switch panel. ‘What on earth is that for?’ I asked incredulously. ‘Your predecessor used to keep his Krugerrands in there’ I was told. What a stupid idea, I thought, how bizarre. Now, the clouds of economic uncertainty swirl over both sides of the Atlantic and like many people I wonder whether there are any safe places for my miniscule savings. I have thought ruefully several times, if only I had bought Krugerrands 20 years ago …