business sharks: Euro falls after Irish Republic 85bn euro bail-out

The euro has been falling against the dollar

The euro has fallen against the dollar as markets opened a day after European ministers agreed a bail-out for the Irish Republic.

On Sunday, ministers reached agreement over a bail-out worth about 85bn euros ($113bn; £72bn).
On Monday, the euro fell 0.8% to $1.3136, its lowest since 21 September.

And Irish, Spanish and Portuguese bond yields remained stubbornly high, indicating the market is not convinced European debt problems have gone away.
Meanwhile, major European markets were also lower in midday trade.
Greek debt Irish Prime Minister Brian Cowen had called the 85bn euros package the "best available deal for Ireland", but opposition politicians had their doubts.
"This is a hugely disappointing result for the country. It's hard to imagine how this deal could have been much worse," said Fine Gael finance spokesman Michael Noonan.
"People are right to feel frightened, and worried about the future, when our own government has sold out the country on such lousy terms."
Also on Monday, the European Commission said the Irish Republic, which will have the biggest budget gap in the EU of 32% this year because of the cost of supporting its banking sector, will reduce the shortfall to 10.3% next year and cut it further to 9.1% in 2012.
However, for 2011 it has kept its forecast unchanged at 1.5%, down from 1.7% for 2010.
At the same time, eurozone finance ministers have opened the way to a six-year extension to 2021 in the repayment period for a European Union and International Monetary Fund loan to Greece.
It would mean an increase in the interest rate charged to Greece, but the rate would not exceed the 5.8% rate the Republic of Ireland is paying for its bail-out.
Bank shares up At midday in London, European stocks were down slightly in the wake of the deal, with London's FTSE down 0.28% at 5,652, Frankfurt's Dax down by 0.4% at 6,818 and Paris's Cac 40 down by 0.6% to 3,705.

Euro v US Dollar

Last Updated at 29 Nov 2010, 15:40 GMT *Chart shows local time

€1 buys	change	%
1.3098	-0.01	-1.08

But Irish bank shares rose, with Allied Irish Banks up 7.58% and Bank of Ireland up 18.35%.

The high rates of return on the government bonds means some market doubt may remain about the bail-out.
"Bond prices have not reacted to the news, so this is not in any way a 'in one leap they were free' type of deal," said the BBC's business editor Robert Peston.
And the cost of insuring Portuguese and Spanish debt against default rose to a record high on Monday.
But Germany's finance minister Wolfgang Schaeuble attacked market speculation over the financial woes of Portugal as "irrational".
At the same time he praised the rescue deal for the Irish Republic.

"The speculation on the international financial markets can barely be explained rationally," he told German radio station Deutschlandfunk.

Countries are put under pressure, leading to "fear effects," he said, adding "the markets can make a lot of money in this way."
And French Finance Minister Christine Lagarde said the bail-out was "sufficient" and that "irrational" markets were not correctly pricing the sovereign debt situation in Europe.
"The amount [of the bail-out] is sufficient because that will keep Ireland afloat for three years," she told RTL radio.
'Best available deal' France and Germany have also said the Republic of Ireland bail-out should draw a line under its debt crisis.
And they have expressed confidence in Portugal's ability to correct its finances and avoid needing outside help.
An average interest rate of 5.8% will be payable on the loans, above the 5.2% currently paid by Greece for its bail-out.
Irish Prime Minister Brian Cowen said it was the "best available deal for Ireland".
It provides "vital time and space to successfully and conclusively address the problems we've been dealing with since the financial crisis began", he said.
He also said the country would take 10bn euros immediately to boost the capital reserves of its state-backed banks.
Another 25bn would remain in reserve, earmarked for the banks.
The Irish government has also said that interest payments on all state debt will account for more than 20% of tax revenues in 2014.
The deal does not require the Republic to change its low 12.5% corporation tax.
'Appalling' But as part of the bail-out, the Irish government will have to make an unexpected contribution of 17.5bn euros towards the 85bn euros total.
Dublin is poised to use its national pension fund and other cash reserves to achieve this.
Opposition parties Fine Gael, Labour and Sinn Fein have attacked this, and other elements, of the bail-out.
Main opposition party Fine Gael called the agreement "appalling", saying the 5.8% annual interest rate on the loan was unaffordable.

bbc.co