Skip to comments.EU: Fitch downgrades Spain by three notches and blames European leaders
Posted on 06/07/2012 5:48:16 PM PDT by bruinbirdman
A serious mishandling of the debt crisis by European leaders led Fitch to axe Spains credit rating by three notches and issue a warnings on the stability of countrys banks, debt levels and economy.
In a report that will be embarrassing for Berlin and Brussels, the credit rating agency said policy mis-steps at the European level and an absence of a credible vision for the euro had resulted in a dramatic erosion of Spains sovereign profile.
Spains credit rating was cut to BBB from A leaving the eurozones fourth biggest economy languishing just above junk status.
Fitch said the cost of bailing out its banks is likely to cost around 60bn (£48.6bn) but could rise to as much as 100bn, the rating agency said, more than three times higher than the 30bn in its last baseline estimate.
Fitch hiked up its estimates of government debt levels from 82pc of GDP by 2013 made at the beginning of this year to 95pc by 2015. The rating agency said that it no longer expected Spains economy to return to growth next year but remain in recession for 2012 and 2013.
While Spain is at the centre of the storm, all sinner states have been effected, Fitch said. The absence of a credible vision of a reformed [monetary union] and financial firewall has rendered Spain and other so-called peripheral nations vulnerable to capital flight and undercut their access to affordable fiscal funding, the report said.
It added: The dramatic erosion of Spains sovereign credit profile and ratings over the last year in part reflects policy mis-steps at the European level that in Fitchs opinion have aggravated the economic and financial challenges facing Spain as it seeks to rebalance and restructure the economy. The intensification of the eurozone crisis in the latter half of
(Excerpt) Read more at telegraph.co.uk ...
It’s all Francisco Franco’s fault.
I am surprised they didn’t blame Bush, like Zero