In the end, the only surprise about the downgrading of Irish bonds to "junk" status is that anyone was surprised.

In recent weeks, Irish bonds have been trading on the secondary market at a little more than 60pc of their face value, that's "junk" to all intents and purposes.

The announcement from ratings agency Moody's was merely stating the blindingly obvious.

One of the great myths of the financial markets is that the ratings agencies, Standard & Poor's, Moody's and Fitch somehow dictate the price of Government and company bonds.

That's the myth.

The reality is that rather than dictate events, the ratings agencies follow them.

Raging

Last night's downgrading by Moody's of Irish Government bonds followed the usual pattern.

As investors have progressively lost faith over the past few months in either the EU or the ECB's ability to solve the crisis raging on the eurozone periphery, the bonds of the so-called PIIGS (Portugual, Ireland, Italy, Greece and Spain) have been falling like a stone in value.

This is because, as the crisis worsened, investors reckoned that there was an ever-greater chance that these countries wouldn't be able to repay all of the money they had borrowed.

Even before this latest announcement, Irish Government bonds had been trading at just over 60 cent in the euro with Irish ten-year bond yields, the implied interest rate, soaring to 13pc.

When your bonds are trading at a discount of almost 40pc to their face value and your implied interest rate is over 13pc then your bonds are already "junk", no matter what the ratings agencies say.

After almost three years of drift and dither, the crisis on the eurozone periphery finally seems to be coming to a head.

In recent days the crisis has spread to Italy, the third-largest eurozone economy after Germany and France.

With Spain, the eurozone's fourth-largest also bubbling away nicely, things look set to come to a head soon, probably within a few weeks.

Most eurozone-watchers, including yours truly had thought that, after Greece, Ireland and Portugal being forced out of the bond markets and into bailouts, the crisis would spread to Spain next. Only after consuming Spain would the crisis move on to Italy.

Which just goes to show how much I know.

Instead of following the "experts'" predictions, the eurozone crisis has jumped directly to Italy.

Now that Italy, which after Japan and the United States has the world's third-largest national debt, is in the firing line the moment of truth has dawned for the eurozone.

With Italy's total debts standing at a massive €1.8 trillion whether or not Moody's downgrades Irish government bonds to "junk" status is neither here nor there.

So what happens next? With Monday's meeting of EU finance ministers having failed to calm the markets, all eyes will be on this weekend's emergency summit of EU leaders.

Unfortunately with Germany, the eurozone's paymaster and largest economy, and the ECB completely at odds the omens aren't good.

Germany is insisting, quite rightly in my view, that the private-sector creditors of peripheral eurozone countries share the pain and take a "haircut" on their investment.

Apocalyptic

Meanwhile, the ECB, the clowns who pushed up eurozone interest rates only last week, is still sticking Canute-like to its "no default" policy.

This sets the stage for the mother of all battles at next weekend's summit.

So are these dramatic developments good or bad news for Ireland?

Though you mightn't think so from some of the apocalyptic coverage, this week's events are almost certainly good news for Ireland.

Now that the crisis can no longer be denied or avoided it's time for the EU and the ECB to, well you know what I mean, or get off the pot.

- Dan White