Yesterday, Standard & Poor’s (S&P), the U.S. financial service provider, reported that it would be taking away its long-term credit rating from AA to AA- on the sovereign debt of the Republic of Ireland by one notch, ending the Government’s attempts to decrease its borrowing, and ultimately the budget deficit. As a result, the borrowing costs have increased significantly.

In the report, S&P made it clear that the budget estimated earlier by the financial service Company to save the Irish Government from the debts and from a plunging economy, has proved insufficient. The report also stated that S&P will not be able to allocate more expenditure to this project despite the promising results it showed in the beginning.

S&P added, "The negative outlook reflects our view that a further downgrade is possible if the fiscal cost of supporting the banking sector rises further, or if other adverse economic developments weaken the government's ability to meet its medium-term fiscal objectives".

S&P expressed its discontent over the decision, but still the whole project has to be put to a halt by December 2010.  

Some experts attribute the reasons behind S&P’s abandonment of the Irish debts to Ireland Treasury’s rejection to instill price tags before the end of 2010.