Ireland did make a lot of really tough cutbacks, which were initially taken extremely well by the mkt. However, more recently the Irish sovereign backstop for the banking system (the bad bank called NAMA) has run into some issues, which have cast doubt on the ability of the sovereign to handle it all. Hence, the most recent widening of Irish CDS and the speculation that they'll need to go to the IMF/EFSF. However, after the most recent, reasonably successful auction, the Irish debt agency (NTMA) said that Ireland is now fully funded through H1 2011. So unless more black holes come to light, Ireland, having done all the right things, might be OK after all (knock on wood).
LOL, I think thats funny because I only came by that irish bond auction yesterday by chance. For some reason the top 10 searches in yahoo sometime yesterday was "Interest rates" Normally people are searching for things like "lady gaga, kim kardashian, or some other random thing like bed bugs" So when I saw interest rates as a top 10 search i thought it might be something big, I clicked on it and saw a link about the irish bond auction & something about 2 billion dollars...I clicked that link and it was a dead link, so I did a search for Irish bond auction under news results and finally read it. Alot of effort went into trying to find that link!
Have the European corporate High-Yield spreads been anything like the U.S.? I don't follow them closely beyond my 401K's PIMCO high-yield fund (which is up, like 25% YoY).