Market pressure on Ireland and other euro zone states eased on Friday after European leaders reassured investors that they won't have to bear the burden if the Irish Republic defaults on its debts. Analysts say the politicians should have stepped in sooner.
When Greece went into financial meltdown earlier this year, the EU set up a fund to help EU countries in need of financial support. Since then, Germany has pushed to change the way that bailout system works in order to make sure that investors, and not tax payers alone, share the financial burden.
The exact nature of the new system has not been made clear and worried investors have sold off bonds in heavily indebted countries, namely Ireland but also Portugal and Spain.
But on Friday European ministers eased investors' fears and tried to be more clear about the rules by reassuring them that they will not impact their current bond holdings. Investors were worried that their investments would expose them to higher costs, but the EU said the new rules would not come into force until 2013.
On Thursday Irish bond yields were at a record high of almost 9 percent, causing the value of the bonds to drop dramatically.
But, Friday's statement from France, Germany, Italy, Spain, and Britain had a positive effect on the markets. On Friday Irish bond yields fell steadily and dipped to below 8 percent, increasing their value.