Growing concern regarding Spain's financial future has resulted in a leading ratings agency cutting its credit score.
Fitch has announced it has decided to reduce its rating on Spanish government debt by three notches to a level of BBB amid fears the nation's ability to service its mounting debts is deteriorating.
The group attributed this to a number of factors, including its estimation that the cost of restructuring and recapitalizing the Spanish banking sector is now somewhere between six and nine per cent of the country's gross domestic product (GDP).
This represents a significant hike on the previous prediction of around three per cent of GDP and is reflective of the falling levels of confidence in Spain's economy among analysts.
Yesterday morning (7 June), Spain managed to sell some €2.1 billion ($2.6 billion) worth of government bonds during an auction, but this failed to lift positive sentiment towards the country on the markets.
By Asim Shah