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| Economy |
| Moody's lowers Spain's credit rating |
| 2010-10-01 |
| (Xinhua) -- Moody's, the third most important credit agency in the World Thursday took the decision to lower Spain's credit rating from a maximum AAA to the next level of Aa1. That means the perspectives for Spain remain stable, but Moody' s expressed concern at the slow pace of Spain's economic recovery given that the construction industry will need several years to return to previous levels. Moody's also highlighted the Spanish deficit and debts, commenting that interest payments mean that the country is still very vulnerable to future moments of volatility on the stock markets. Moody's Spain analyst, Kathrin Muehlbronner calculates that Spain's GNP will rise at just 1 percent a year, lower than its EU counterparts Britain, Germany and France, where growth will be between 1.5 and 2 percent. The Agency believes that the country has to address the double problem of low productivity and a lack of competitiveness, claiming the country suffered high labor costs and low workplace flexibility. It was, however, positive about the recent labor reforms passed by the Spanish government. Those reforms which make it easier for employers to sack workers were the main reason for the general strike which was held in the country on Wednesday. Muehlbronner highlighted that the Spanish government's policy of reducing the fiscal deficit, which fell by 42 percent in the first eight months of this year, was the main reason Spain's credit rating had only fallen by one point. |
| Posted by:Fred |
| #2 Ireland is in the running among functioning countries, Barbara. I just read that the cost of their bank bailouts will be something like a quarter of GDP, separate from any other problems they may have. link |
| Posted by: trailing wife 2010-10-01 15:52 |
| #1 Is it as low as Greece's yet? Who's going to "win" the race to the bottom (other than Zim-Bob or NorK)? |
| Posted by: Barbara Skolaut 2010-10-01 15:29 |