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

Moody's Investors Service cut Ireland to Ba1 from Baa3, citing the probability that Ireland will need additional official financing and for investors to share in losses before it can return to 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 European finance ministers failed to present a solution to the financial contagion that's threatening to spread to Italy from Greece, Ireland and Portugal. In Spain, Finance Minister Elena Salgado said the nation might need to endure even deeper spending cuts in 2012 than those currently planned. Ireland, which had a top Aaa rating just over two years ago, has suffered after a real-estate boom collapsed, fueling bank bailouts and a surge in the country's debt.