Spain's credit rating
News Article Date: Tuesday 30th of November 1999
MADRID, Jan 13 (Reuters) - Spanish Economy Minister Pedro Solbes on Tuesday said he saw a risk of a downgrade in Spain's 'AAA' sovereign debt rating a day after Standard & Poors threatened such a move.
'It's a risk. Obviously in the case of Standard & Poors, there are other rating agencies as well,' Solbes told reporters when asked about chances of a downgrade at the opening of an exhibition on 10 years of the euro at the Bank of Spain.
Spain on Monday became the third euro zone country since Friday to be warned by Standard & Poor's rating agency that its credit rating is under threat from the global credit crisis that continues to wreak havoc in Europe.
Just as in the case of Ireland and Greece last Friday, S&P said Spain faces a painful rebalancing of its economy and a marked deterioration of its public finances.
Solbes said Spain's public sector budget deficit was likely to be just above an EU limit of 3 percent of gross domestic product in 2008 and considerably above it in 2009.
He said the yield spread on Spanish bonds had widened against benchmark German debt since Spain received its AAA rating in 2004, in line with the shift in Spain's economic fortunes.
'It's true that there is a certain differential in our valuation in terms of the cost of financing, which reflects our reality,' Solbes said.
S&P forecasts Spain's budget deficit will peak at 6 percent of GDP in 2009, and remain above 3 percent until 2011, after its government launched over 70 billion euros in stimulus measures
Restrictions on foreign financing have collapsed Spanish housing and consumer spending booms and sent unemployment to the highest rate in the European Union at 13.4 percent in November.
S&P saw the risk of prolonged weak growth after the Spanish economy entered its first recession in 15 years during the fourth quarter.
Worried about the Spanish Economy and the effect on your Spanish mortgage payments ? Send us an enquiry at http://www.europamortgages.com/spanish-mortgage-enquiry.htm or our partner site at http://www.amortgageinspain.com/mortgages_spain.html thanks for reading
Send us a mortgage enquiry for your mortgage requirements in Spain, France, Portugal, Cyprus, Florida, Dubai and Turkey
Click here to send a Spanish mortgage enquiry
Follow our mortgage blog – the latest news and often irreverent views
Click here to follow our overseas mortgage blog
Thanks for reading