Spain's credit rating downgraded by Fitch as international bailout looms

Source: The Guardian

The ratings agency Fitch delivered a strong rebuke to Europe's policy elite tonight when it sharply downgraded Spain's creditworthiness and moved the eurozone's fourth-biggest economy a step closer to an international financial bailout.

Fitch said mistakes at a European level that had allowed the debt crisis to escalate were in part to blame for its decision to cut Spain's credit rating by three notches to just above junk bond status.

The move – which follows the pattern that led to Greece, Ireland and Portugal needing help from Europe and the International Monetary Fund – makes it harder and more expensive for Spain to borrow money on the world's financial markets.

Fitch, which also served notice to George Osborne that the UK faced losing its AAA status if the double-dip recession intensified, cited the ballooning cost of bailing out Spain's struggling banks and a longer-than-expected slump for the downgrade from A to BBB.

Read more: http://www.guardian.co.uk/world/2012/jun/07/spain-credit-rating-downgrade-fitch