How can foreigners look at Ireland as a risky proposition even though the country has approximately half the debt levels of say, an Italy or a Greece, members of the Central Bank were asked at a media briefing last week.

The more interesting question may have been why Ireland is seen as risky a bet as Next, the fashion retailer. Almost all large debtors around the world, be they sovereign countries or a seller of clothes, are ranked by their perceived risk to repay their loans.

The sovereign debt market is where the cost to a country of repaying its loans is worked out: the higher the interest rate the country has to pay, the riskier the country has become. But there's another global insurance forum, called the Credit Default Swaps (CDS) market, which ranks both big companies and countries in a league table of the risky; last week, Argentina, Iceland and Latvia were the riskiest countries to lend to, GM and Ford the riskiest firms.

Unfortunately, the market brackets the Irish government alongside Next because of the perceived risk of a bank here going bust. Greece, Italy, Chile, Belgium and Israel are seen as less likely to default on their loans. Some good news though. The interest rate Ireland must pay foreigners fell from 6% to just below 5.5% last week. That's still a startlingly high interest rate, but foreigners were slightly more reassured about the imminent recapitalisation of the Irish banks, and that the government and public sector unions will agree spending cuts.