Spanish govt bonds downgraded

19 October 2011

Spain's government bonds have been downgraded due to there being no sign of a solution to the predicted economic emergency in the eurozone.

Moody's has taken the decision to lower the Iberian nation's rating by two levels from Aa2 to A1 with a negative outlook and attributed this call solely to the pressure it is under at present.

Earlier this week, Standard & Poor's (S&P's) came to the same conclusion as the country's financial future continues to be considered in danger.

In a statement following the announcement, Moody's explained that the "downside risks from a potential further escalation of the euro area crisis" weighed heavily on its decision.

This comes after Spanish financiers Santander and BBVA has their credit ratings cut by S&P's and Fitch.

Recently, finance ministers from the G20 called on banks and politicians to come up with a credible plan to deal with the debt by next week, but a deadlock still exists between such involved parties.

By Gary Cooper

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