Marketwatch has an informative review of the state of the economic conditions in Ireland, including a brief review of the bank guarantees provided by the government. Ireland, part of the group of potentially problematic European countries that includes Portugal, Italy, Greece and Spain, has dominated headlines over the past week as the national budget is due next month. Ireland has promised to cut expenditures and raise taxes in order to keep the deficit low and not add substantially to outstanding public debt. This declaration of an austerity strategy was promised in an attempt to reassure bond investors that Ireland would be fiscally responsible.

While Ireland will not need to issue any new bonds until the first half of 2010, the current yields on outstanding debt have increased dramatically with the 10-year note reaching 8.5%, approximately 6% higher then a 10-year German note. If Ireland has to issue debt at such a high interest rate, it will be costly.