U.S. international credit rating agency Moody’s Investors Service said 22, in view of the Irish banking crisis serious than expected, will be reduced Ireland’s sovereign credit rating. In Ireland, China, due to the need for assistance, the Government has gone back undermine the credibility of the debt crisis is evolving as the political crisis.

Number of ratings will be even lower level

Ireland is likely to be even lower sovereign credit rating a few levels, but will remain at investment-grade range. Analysts believe that Moody’s is likely the only Irish sovereign credit rating to junk higher.

Irish banking sector and the government closely tied, although the EU’s aid to help banks out of bankruptcy fate, but will greatly affect their credit, and thus low sovereign credit rating.

Foreign aid is to handle “double-edged sword”, on the one hand to help the Irish response to the crisis, but on the other hand increase the debt burden of the Government of Ireland, and thus a negative impact on sovereign credit ratings.

Assistance under harsh conditions

EU economic and monetary affairs, said 22 members of Olli Rehn, the EU is currently working with the Irish government plans to aid the negotiations will be completed before the end of 11. Outside assistance is focused on the conditions.

European Union and the International Monetary Fund assistance to the Irish plan to attach strict conditions, the Irish will no longer be a low-tax countries, the tax rate will be adjusted to normal levels.

Prior to the issue in the tax rate has not let go of the Irish government on key issues in this attitude is loose.

Ireland had been reluctant to request assistance in an important reason, is worried that EU intervention in its tax policy. Irish Government’s current corporate tax is only 12.5%, less than half the euro-zone average. It is because of low tax rates, many multinational companies to set their European headquarters in Ireland and make Ireland a capital investment of the EU external transfer station. But some EU countries to the policy as a major thorn in the side, hatred than eradicated.

The debt crisis turned into a political crisis

Over the past week, in the need for assistance, the Irish government back on its word, has been from within the ruling coalition and opposition parties criticized. Latest polls show Prime Minister Brian Cowen led the Republican Party fell to record low support rate of 17%. A large number of protesters gathered in Parliament House 22 around the requirements of Cowen resign.

As one of the ruling party, the Greens 22, request early next year in January parliamentary elections and issued a statement that the Government in the past week on whether to apply for financial aid evasive, so that people “feel misled and betrayed.”

Irish Government intends to Dec. 7 to submit to Parliament in 2011 Budget, the Budget includes the total six billion euros in the financial “thin” package. Although the Green Party said that because of the overall situation into account, will continue to support this budget passed, but some members of the undecided independent budget can be passed to the left of the suspense.

22 Cowen night stand that he was willing to hold early elections, but must be in the successful implementation of the financial “downsizing” after the access to financial aid.

Ireland will hold parliamentary elections this week, will be held in early 2011, three by-elections. Fragile ruling coalition had a majority in the House advantage may disappear.

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