Thursday, April 29, 2010

Spain downgrade sparks European sell-off

Spain's debt has been downgraded in a further widening of Europe’s government debt crisis.

The move follows its reductions yesterday of Portugal and Greece, which sent shock waves through world markets.

Standard & Poor’s said its decision to downgrade Spain’s credit rating by one notch to AA from AA+ is due to its expectation that the country will suffer an “extended" period of subdued economic growth.

“We now believe that the Spanish economy’s shift away from credit-fuelled economic growth is likely to result in a more protracted period of sluggish activity than we previously assumed,” the S&P credit analyst Marko Mrsnik said. (more)

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