Brussels, 14/10/2011 (Agence Europe) - A blow to confidence was struck on Friday morning, 14 October, when credit rating agency Standard and Poor's announced that it had downgraded Spain's debt by one notch to AA- due to uncertain growth prospects and the expected deterioration of the country's banking system. The European Commission made reassuring noises, pointing out that Spain has taken measures to consolidate its public finances.
AA- is the fourth highest rate and denotes high quality debt. The decision by Standard and Poor's comes a week after Fitch Ratings downgraded Spain by two notches to AA-.
In Brussels on Friday 14 October, the European Commission said that Spain had taken important measures to consolidate public finance. A spokesperson for EU Economic and Monetary Affairs Commissioner Olli Rehn said that Spain had met its targets by means of extra budget measures in August and September this year. Spain has met all its targets for 2010 but in the first half of this year, there were some “deviations” by the country's regional authorities, which could have endangered Spain's ability to meet its targets, admitted the spokesperson, saying that corrective action had been taken by central government and regional governments alike to meet the objectives. (LC/transl.fl)