Irish into the Greek-style plight,the new round of European debt crisis

EU Economic and Monetary Affairs Committee members began Olli Rehn 8, a two-day visit to Ireland. According to plan, Rennes trip focused on the Irish government budget cuts announced last week plans to be checked.

But the Bloomberg article, the Irish government will use this opportunity to strive to "lobbying" EU officials, who believe they have the ability to restore the national finances in order to avoid a Greek-style rescue package. The background is the recent record highs of Ireland Treasury yields, the market in need of international assistance to the country and the debt crisis may break out again in Europe concerns rose sharply.

As investors worried about the Irish can not effectively manage its financial problems, the Irish 10-year bond yields 8 days straight last Thursday to 7.7% higher, the euro once again set a record since the founding; and Germany between the yields of similar spread is widened to a record high of 520 basis points, has been greatly over Greece to the European Union in April this year, the level before seeking help.

At the same time, Portugal, Greece, Spain, borrowing costs have also showed varying degrees of rise. So the market worried about rising borrowing costs will continue to make Ireland and other countries continued to increase default risk of bonds, thus becoming another Boou debt crisis caused the fuse.

The face of rising borrowing costs continued to pressure the Irish Finance Minister Lenihanti 4 night announced before a scheduled announcement in mid-budget reduction plan in an attempt to reassure investors. Under the scheme, the Irish government next year will increase by 60 billion euros of savings and tax revenue, accounting for 3.6% of its GDP; in the next three years, plans to cut spending nine billion euros, the goal is in the budget deficit in the GDP by 2014 in the proportion from the current 12% to 3%. In fact, if the calculation of the cost of bank bailouts go, Ireland this year's deficit will reach 32% of GDP. Lenihan will also be published by 7th of next month its 2011 Budget.

Analysts pointed out that the budget reduction plan can convince investors that the Irish government have the ability to restore the national finances in order, will be to determine whether they need to seek international assistance to the key factors. According to reports, although Ireland currently has cash reserves of 20 billion euros the year without funding guarantees, but these reserves can only last until mid-2011, will not succeed if the Irish funding from the international market, it will have the same as Greece apply for international assistance. However, whether the Government of Ireland or Portugal, are unwilling to do for the EU as Greece and the International Monetary Fund's financial support, because the stringent requirements of these institutions will make their own borrowing costs increasing pressure.

Irish government spending last year as a review of the former Federal Reserve economist, team leader Cam McKinsey believes that if the Irish Government's financial management measures will enable investors to be convinced, borrowing costs to fall, then this country is still the need for international assistance memory variables. On the contrary, it is the explosive thing. Credit rating agency Moody's are more optimistic that Greece, Portugal and Ireland is likely to avoid sovereign debt default, because the three Jieyou strong domestic investor base, even in times of tension, local banks and pension funds and other institutions will also buy government bonds.

Supremacy in Europe, resurgence of the debt crisis situation, the Chinese government is still heavily in debt to Portugal and other countries came to the rescue. Chinese President Hu Jintao said during a recent visit to Portugal, China is willing to take practical measures to help Portugal cope with global financial crisis.

Reuters said that the delegation to visit Europe Fu Ying, Chinese Vice Foreign Minister told Reuters 6, China remains committed to invest in European bonds, and are willing to lend a helping hand to the Portuguese, "our friends have difficulties, we will worry about . " Chinese Premier Wen Jiabao also said last month, will actively participate in the Greek attitude to subscribe for newly issued government bonds.