Fitch's Spain downgrade casts more shadow on Europe's economic outlook

08:22, May 31, 2010      

Email | Print | Subscribe | Comments | Forum 

Amid skepticism over the European Union's ability to clamp down the debt crisis and keep it from spreading to other weaker economies, U.S. markets rattled as global rating agency Fitch cut Spain's credit rating to AA+ from AAA on Friday.
The move not only rekindled the uncertainties that caused the euro depreciation early this month, but also activated the jitters over Europe's debt woes.

MARKETS RATTLES

Fitch Ratings downgraded on Friday Spain's credit status by one notch, saying its economic recovery would be more muted than the government forecast.

"The economic adjustment process will be more difficult and prolonged than for other economies with AAA rated sovereign governments, which is why the agency has downgraded Spain's rating to AA+," Fitch said.

It also said the process of reducing the "private sector and external indebtedness will materially reduce the rate of growth of the Spanish economy over the medium-term."

This move came just one day after the lower chamber of Spanish parliament passed by only one vote a package of 15-billion-euro (18.5-billion-dollar) austerity measures.

Some analysts said Fitch "deliberately" choose the day, -just after the passing of Spain's austerity plan, -to make the announcement, highlighting the agency's doubts over the country's ability to ensure economic growth while cutting the deficit.

Though it is too late for the European market to show their reaction over Spain's downgrade on Friday, the downgrade proved to be strong enough to affect U.S. market with its major indexes tumbling in afternoon trading.

Meanwhile, the euro returned all its Friday gains, and continued its losses against the U.S. dollar while the oil markets continued to plunge as investors fretted over the broader impact of eurozone debt crisis on global growth.


【1】 【2】

(Editor:张茜)

  • Do you have anything to say?

双语词典
dictionary

  
Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • The world's first Boeing 787 Dreamliner for delivery arrives at Haneda airport in Tokyo, capital of Japan, on Sept. 28, 2011. The Boeing 787 Dreamliner, whose buyer is All Nippon Airways (ANA), will implement a flight of ANA on Oct. 26 from Tokyo's Narita Airport to Hong Kong in south China. (Xinhua/Ji Chunpeng)
  • A Libyan National Transitional Council (NTC) fighter shows what is believed to be human jawbone found inside a mass grave near Abu Salim prison in Tripoli, Libya, Spet. 27, 2011. The NTC on Sunday said they had found a mass grave containing the bodies of 1,270 people killed by Gaddafi's security forces in a 1996 massacre at Abu Salim prison in southern Tripoli. (Xinhua/Li Muzi)
  • Rescue workers and local residents search for survivors after a building collapsed in old Delhi, India, Sept. 27, 2011. At least 10 people were killed and 35 injured when an old three-storey building collapsed. More than a dozen people are still feared trapped under the debris, police said. (Xinhua/Partha Sarkar)
  • A visitor has flying experience in the windmill castle of Jinshitan National Holiday resort in Dalian, northeast China's Liaoning Province, Sept. 27, 2011. The castle is a 23-meter-high building with 21 meters in diameter. The castle uses wind tunnel to make objects floating in the air. It is the first indoor stadium in China, which enables people to have flying experience. (Xinhua/Zhang Chunlei)
  • Forces of the Libyan National Transitional Council (NTC) shoot shells to the fighters loyal to Muammar Gaddafi outside Bani Walid, Libya, Sept. 27, 2011. Bani Walid is still occupied by fighters loyal to Muammar Gaddafi. (Xinhua/Hamza Turkia)
  • Children present creations with guests during a charity show "Fashion Kids for Children in Crisis" at the Milan Fashion Week Women's Wear Spring/Summer 2012 in Milan, northern Italy, Sept. 27, 2011. (Xinhua/Wang Qingqin)
Hot Forum Discussion