File under: heads they win, tails we lose… May 29, 2010Posted by WorldbyStorm in Economy, European Politics, Irish Politics.
Fitch Ratings cut Spain’s credit rating today, saying the government’s efforts to reduce debt will weigh on economic growth in the coming months – another blow to prime minister Jose Luis Rodriguez Zapatero’s efforts to shore up confidence in the state finances.
The ratings agency cut the country’s rating one notch from AAA to AA plus, saying Zapatero’s efforts to close the budget deficit “will materially reduce the rate of growth of the Spanish economy over the medium term”.
The ratings agency decision echoes concerns from economists that efforts to cut state debt will also withdraw stimulus from the economy and hinder growth. Lower growth in turn means gathering less in tax revenues. It comes after a similar move a month ago by fellow ratings agency Standard & Poor’s. The third main ratings agency, Moody’s, has kept Spain on its highest level so far.
Guess what Ireland’s rating is.