Another day has brought yet another drop in a European country’s credit rating.
This time Standard&Poor’s has done the downgrading, with Spain on the receiving end. Madrid’s long-term rating has been cut by one notch. The move mirrors last week’s lowering of Spain’s level by fellow agency Fitch.
S&P cited Spain’s tightening credit, high level of private-sector debt and high jobless rate among the reasons for downgrading it to AA-.
And it signalled the rating could drop even further, saying there was still a risk the euro zone’s fourth-largest economy could slip into recession next year.
It all underlines the challenges European finance ministers face, as they meet G20 counterparts in Paris today to discuss the deepening debt crisis.