Ireland’s economic outlook worsened on Monday as the country’s central bank cut its growth forecast for this year, with gross domestic product now set to increase 0.2 per cent against previous forecasts of 0.8 per cent, the Financial Times reported. The slowing economy will compound the challenges the Fianna Fáil-led government faces in framing this year’s budget, which is critical to restoring investor confidence in Ireland’s fiscal consolidation plan.

Russian billionaire Roman Abramovich may take legal action against the Government over its decision to make subordinated bondholders in Irish Nationwide (INBS) pay part of the bill for dealing with the building society’s huge property losses, The Irish Times reported. Minister for Finance Brian Lenihan said that he expected bondholders in INBS and nationalised lender Anglo Irish Bank to make “a significant contribution” towards meeting the cost of a bill of up to €40 billion for cleaning up their years of reckless lending.

Ireland's cost of borrowing slid on bond markets Friday as investors took a positive view of the country's latest efforts to take control of Europe's worst deficit and a titanic bank-bailout effort, the Associated Press reported. The interest rates, or yields, on 10-year Irish bonds fell in early trade to 6.4 percent, a two-week low and 4.2 percentage points above the yields of benchmark German bonds. Earlier this week the Irish treasuries were at a euro-era high of 6.9 percent and 4.7 points above their German counterparts.

The government’s borrowing costs hit a record high again yesterday after two credit rating agencies warned that Irish State debt faces further downgrades, The Irish Times reported. The cost of State borrowing jumped as the yield or interest rate on 10-year Government bonds jumped by a quarter of a percentage point to 6.72 per cent. The bond yields are now trading at levels similar to Greece at the start of April – only a month before the Athens government sought international support.

Ireland's finance minister has warned the failure of Anglo Irish Bank would "bring down" the country, as regulators prepared to reveal Thursday the cost of bailing out the stricken lender, Agence France-Presse reported. Brian Lenihan also pledged to stand behind the bank which will reportedly cost the state some 30 billion euros (41 billion dollars) to rescue, in comments to the Financial Times newspaper. "Any Anglo failure would bring down the sovereign," the finance minister was quoted as saying in the FT.

A credit union has had to be given access to €4.3m from a bailout fund after a spike in bad debt provisions, it has been confirmed, The Irish Independent reported. Charleville Credit Union in Co Cork has been provided with the guarantee, with the money to be given to it if some of its loans are not recovered within two years. A deficit of €5.5m was recorded after the union was forced to put aside extra provisions for bad debts, due to the severe drop in the value of properties which loans were secured against.

Concerns over the financial stability of countries on the euro-zone's fringe mounted Monday as one of Ireland's largest banks had its credit rating cut and political tensions fueled doubts about Portugal's deficit-cutting plans, The Wall Street Journal reported. Moody's Investors Service downgraded the senior debt of Anglo Irish Bank Corp. by three notches to Baa3. Ireland's property-market collapse has crippled its banks, and the government has so far spent €33 billion ($44.5 billion), about one-fifth of its gross domestic product, rescuing them.

The liquidator of the well known legal search company, Brennans Law Searchers Limited, has confirmed he has entered into a license agreement with Brady & Co. (Law Searchers) Limited as part of the creditors’ voluntary liquidation process, InsolvencyJournal.ie reported. Ken Fennell of kavanaghfennell has been appointed liquidator to the company. “The licence agreement offers the opportunity to safeguard the business and jobs while we undergo the sales process”, said Mícheál Leydon of kavanaghfennell, who is also involved in the liquidation.

It is unthinkable that Ireland or its banks would default on senior debt, Finance Minister Brian Lenihan said on Wednesday. Opposition politicians and some media commentators have called on Lenihan to force bondholders in Anglo Irish Bank to take some of the hit for the nationalised lender's massive losses, which are a major burden on the exchequer. "It's unthinkable that Ireland would default on senior debt or that Ireland's banks would default on senior debt," Lenihan told Reuters in parliament.

Former Anglo Irish Bank chairman Seán FitzPatrick has a net income of just €188 per month, according to documents furnished to the High Court, The Irish Times reported. A statement of affairs, provided to the court as part of Mr FitzPatrick’s bankruptcy proceedings, disclosed that the former bank chief has debts of more than €145 million, compared to assets of just over €47 million. During a brief hearing yesterday, the court was told State-owned Anglo Irish Bank was withdrawing its application to have its own trustee appointed to replace official assignee Chris Lehane.