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THE CREDIT RATING agency Moody’s downgraded Spain’s sovereign credit rating by three notches tonight, days after the government sealed a deal to borrow €100 billion for its troubled banking system.
The agency said that the new loans, the details of which have yet to be finalised, will increase the country’s debt burden at a time when it already has limited access to normal financial lending markets.
“This will further increase the country’s debt burden, which has risen dramatically since the onset of the financial crisis,” Moody’s said, setting the new rating at Baa3 from A3.
This new rating is one notch above ’junk’ status.
The yield on Spanish 10-year bonds hit 6.8 per cent yesterday as the deal announced at the weekend did little to allay the fears of investors who worry that the bank bailout will not be enough to save Spain.
In issuing news of its downgrade this evening, Moody’s also cited the continued weakness of the country’s economy where unemployment is around 24 per cent and economic growth is stagnant.
“While the details of the support package have yet to be announced, it is clear that the responsibility for supporting Spanish banks rests with the Spanish government,” Moody’s said.
- with reporting from AFP
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All of this because Germany insists the bailout goes through the government rather than directly to the banks. Merkel and her government are starting to look very incidious indeed. Riduculous that one country can practically hold a continent to ransom.
The euro end is near
Seems to me that the Euro is very close to being “JUNK”.
Corrupt to core these Rating agencies:
http://www.businessinsider.com/moodys-analyst-conflicts-corruption-and-greed-2011-8
http://www.infiniteunknown.net/2012/01/19/max-keiser-on-corrupt-credit-rating-agencies-the-euro-the-us-dollar-quantitative-easing-hyperinflation-and-gold-video/
They may be, but their right to point out loading more debt on to a country just is not going to work. You don’t have to be a financial wiz kid to work that out.
I totally agree Kerry Its complete madness,More debt=More Debt.
I think the whole of Europe will erupt in a political chaos in the coming years from the politician’s bailing out corrupt banks,while the normal European having there living standards lower over the next 20 years.
German is hell bend on gaining more and more power seeking a United States of Europe while debt slave country’s obey and pay something will crack.
Green thumb if you love Rafa !!
Both thumbs are grey on my iPhone!
How do you know someone has an iPhone? They tell you…
I wonder who wants the European project to fail. Its seems to be a never ending quagmire and certain people want an unstable Europe in order for it to become a two tier society.
Correct. This so-called “crisis” is being pushed to the limits by big monied interests who are using it to push through a neofeudalist agenda and roll back the welfare state and abolish any kind of workers’ rights.
Whether the rating agencies are good or bad, effective or not. They are still used by investors to determine investment suitability. Spain has taken a massive blow to its position as a viable borrower, not that it was viewed as that after the mini bailout fiasco of this week
By the end of this month, Spain’s entire borrowing costs will be on the ECB/EU/ESM head and Italy will be doing all it can to prevent from being on the same boat. The EU crisis is coming to a head.
The good news is that those who said the EU/ECB approach was madness are going to be vindicated. The bad news is that those who said the EU/ECB approach was madness are going to be proven right.
Lets just hope someone has a plan B and implements it ASAP.
lol, plan b, good one!
I wonder what our unemployment rate would be if we didn’t have so many emigrating? Would it be similar to Spain’s?
This could be the edge we need to win the match!!!
Typical US bankers are betting on Europe to fail. No-one else sees that.
The Euro will survive. I believe. I am not a eurosceptic like British Foreign Minister, William Hague, who gleefully called the Eurozone a burning building with no exits last year. I am on the side of the new French President, Francois Hollande, who is calling for a Eurozone based credit rating agency. Moody’s is US based.
What Good Will that do? put an EU spin on things? still doesn’t address the problems.
Im up one day down the next…where the hell is this all going too…can somebody please tell me what the hell is going on..speak clearly and slowly as me brains confused.
There can’t be vary many countries left with a triple A rating?
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