Spain debt rating

Last Wednesday Spain became the third country in Europe to have their debt rating downgraded. After downgrading both Portugal and Greece over the past two weeks, the ratings agency Standard & Poor's slashed its rating of Spain by one notch. This downgrade had an immediate effect on shares in Europe sending them plummeting to a seven week low. Spain's long-term sovereign debt rating was reduced to "AA" from "AA+." The short-term rating was left unchanged at "A-1+." Spain's 2010-2016 economic growth forecast was reduced to an annualized rate of 0.7% from a previous 1%. The growing fear is that the fallout from Greece and even Portugal — which together compose just 5 percent of European economic activity — could be a mere sideshow if Spain, with its much larger economy, has difficulty repaying its debt.