- Title: SPAIN: Spaniards react to Standard & Poor's downgrading of Spain's credit rating
- Date: 30th April 2010
- Summary: DAILY NEWSPAPERS "EL PAIS", "EL MUNDO" AND "ABC" FRONT PAGE OF SPANISH CONSERVATIVE DAILY "EL MUNDO" WITH HEADLINE READING: "SPAIN'S CREDIT AND ZAPATERO'S OPTIMISM BANGED" FRONT PAGE OF SPANISH LEFT-WINGED DAILY "EL PAIS" WITH HEADLINE READING: "THE GREEK CONTAGION REDUCES THE NOTE OF THE SPANISH DEBT." FRONT PAGE OF SPANISH CONSERVATIVE DAILY "ABC" WITH HEADLINE READING: "SPAIN LOSES COMPETENCE"
- Embargoed: 14th May 2010 23:43
- Location: Spain
- Country: Spain
- Topics: Economic News
- Reuters ID: LVA6YJSM1G5PPFLOQELRHLWWFKVW
- Aspect Ratio: 4:3
- Story Text: Spain woke up on Thursday (April 29) to bad economic news.
Ratings agency Standard & Poor's downgraded Spain's credit rating on Wednesday (April 28), saying a longer-than-expected period of low growth could undermine efforts to cut the budget deficit.
The move added to investor worries that the euro zone's debt crisis is spreading, after a downgrade for Portugal the previous day, and amid ongoing negotiations over emergency aid requested by Greece.
Spain's government, however, appealed for calm.
"Spain is a country that knows how to deal with the difficulties. We have always done it with rigour," Deputy Prime Minister Maria Teresa Fernandez de La Vega told reporters in Madrid.
"Yesterday I said, and I don't have a problem to repeat, that we are doing our homework and we are doing well. We have a serious plan of fiscal consolidation and deficit reduction, reducing to 3 percent in 2013. We have adopted an austerity plan and launched a labour reform. We are working with all measures to fulfil our commitments. So I want to send a message of confidence to the citizens and calm for the markets," Fernandez de La Vega said.
Spanish Finance Minister Elena Salgado sought to send a similar message.
"We must be calm. We have a deficit reduction plan that we're putting into effect. We are meeting one by one all the deadlines that we have set and I think that the markets will appreciate it, so this is a temporary situation that will return to the normality with the solution of the Greece problem," she told Spanish television.
S&P's outlook on Spain is negative, and the agency said there is a possibility of another downgrade if the country's fiscal position worsens more than it currently expects. S&P now forecasts annual GDP growth of 0.7 percent between 2010-2016, down from previous expectations of 1 percent annual growth over the period.
"The situation is bad," Madrid resident Miguel Angel responded. "And with this situation with the triple A they are giving us it's even worse. Either they change or we're going to be badly off," he said.
Another man displayed anger at the Spanish government's handling of the economy.
"Well, the first thing that comes to me is that the one who didn't predict the crisis and who helped creating it is not jobless now. These people didn't predict the crisis before it happened, later they helped make it worse and now... I think they're just idiots," he told Reuters.
"Stronger measures will have to be taken to float the economy to the surface. With the two main parties reaching an agreement. They will have to do it," a woman identified as Ana said.
Spain's newspapers all reflected concerns over the apparent spread of the euro zone's debt crisis, following S&P's downgrades of Greece and Portugal on Tuesday.
Analysts have said that because Spain is a considerably larger economy than debt-riddled Greece and Portugal any worsening of its creditworthiness could create yet bigger headaches for the euro zone as it deals with Athens' crisis.
S&P has downgraded Spain twice since the global economic crisis started. The other two credit rating agencies, Moody's and Fitch, still maintain Spain on their top ratings.
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