Ireland joined Portugal and Greece as the third euro-area nationto have its credit rating reduced to below investment grade asEuropean Union finance ministers struggle to contain the region'ssovereign debt crisis.

Moody's Investors Service cut Ireland to Ba1 from Baa3, citingthe probability that Ireland will need additional officialfinancing and for investors to share in losses before it can returnto the private market to borrow. The outlook remains “negative,”Moody's said in a statement yesterday.

The euro fell to a four-month low against the dollar as Europeanfinance ministers failed to present a solution to the financialcontagion that's threatening to spread to Italy from Greece,Ireland and Portugal. In Spain, Finance Minister Elena Salgado saidthe nation might need to endure even deeper spending cuts in 2012than those currently planned. Ireland, which had a top Aaa ratingjust over two years ago, has suffered after a real-estate boomcollapsed, fueling bank bailouts and a surge in the country'sdebt.

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