Irish bond yields rise above 9%

The 10-year Irish bond yield has risen above 9% as Irish bonds fall for the 13th day in a row. Traders continue to offload Irish bonds, concerned over the ability of the country's government to pay its debts. That pushed the difference between the returns investors demand to lend money to the Irish government and the German government even higher.Ten-year German bund yields are one basis point lower today at 2.43%. That means that the difference in the bund and Irish bond yields is around 6.6 percentage points. "The bond spreads are very serious and there is international concern throughout the eurozone about that," says Irish Finance Minister Brian Lenihan. Lenihan believes that part of the reason behind the jump in yields relates to "unintended" comments from German officials about a new permanent rescue mechanism for the eurozone that would force private debt holders to help shoulder the costs of future rescues. Lenihan said Ireland was seeking clarification of the German plans and would soldier on without aid.Patrick Honohan, the Irish central bank governor, says that there is no reason Ireland will not be able to return to the bond markets in 2011 as its government steps up austerity measures to reduce its budget deficit and restore investor confidence.The International Monetary Fund says that Ireland has not requested financial assistance. Ireland became heavily indebted after having to bail out its banking sector during the financial crisis. The government has been implementing swingeing spending cuts, undeterred by the unpopularity of such measures. More cuts are to be unveiled in December. President of the European Commission Jose Manuel Barroso said that the EU was ready to step in to support Ireland if necessary. 'We are monitoring the situation closely, but we support the efforts of the Irish authorities,' he said.Bank of Ireland and Allied Irish Banks are both well down on the day. Bank of Ireland has fallen by one-fifth over the past week. Shares in RBS fell on concerns about the part-nationalised bank's exposure to Ireland. RBS subsidiary Ulster Bank posted a loss of £176m in the third quarter and the bank has operations on the other side of the border as well.