FRANKFURT (MNI) – The risen spreads of Irish bonds are “a setback”
for the hope that markets would reflect the country’s efforts to
demonstrate fiscal credibility, European Central Bank Governing Council
member Patrick Honohan said in an interview published late Wednesday.

The head of Ireland’s central bank told Telegraph that “the spreads
are a setback for our hopes of a narrowing to reflect the fiscal
credibility of the country. I dont look at them every day but at this
level they are ridiculous.”

Although tax revenues are “undershooting a little,” there is
nothing to worry about yet, the paper reported Honohan as saying. He
dismissed deflationary fears, saying the country was at no risk of being
pushed “head over tail downwards.”

“The lesson is that if you want to join a currency union with low
inflation, you had better not get out of line,” he added.

–Frankfurt bureau tel.: +49-69-720142. Email:

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