The Spanish press is pretty clear about what it thinks of Spain’s credit worthiness downgrade – the country is insolvent screamed one headline today, and other reactions have been equally scathing. Government figures have expressed surprise at the writedown; not the only thing they have not seen coming for this Madrid resident;
“The first thing that gets me is that they were unable to predict the crisis and they helped make it happen. They didn’t lose their jobs. These people didn’t see the crisis coming, then they made it worse. Now, as far as I’m concerned they are all idiots.”
This woman wanted a more unified political approach:
“I think they need to make more important changes and for that the two main political parties should work together.”
The government says it remains on course to cut its deficit back to within EU rules by 2013, and the markets should calm down. Two of the big three ratings agencies have left Spain’s debt in their top investment grade.
But there’s uncertainty about GDP growth being as strong as forecast, and worries over the medium-term cost of paying for the highest unemployment in over a decade. Still, the agencies got the financial crisis wrong, didn’t they says the boss at ING Spain Bram Boon;
“It’s blown out of proportion. I’m still surprised at the seriousness with which the markets look at ratings agencies because they showed one or two years ago that this is not the most reliable benchmark to look at.”
But with key sector construction flatlining, on which Spanish growth is dependent, a lot of people need to find jobs if the economy can be boosted through consumer spending, an option that seems far away for now.