Wake up

11 December 2009 By Fiona Maharg-Bravo

A rating agency’s warning about a possible downgrade has fallen on deaf ears. It seems the Spanish government isn’t prepared to take tough action to control its ballooning deficit. It isn’t too late to act. Here is a fivepoint plan.

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Standard & Poor's, the credit rating agency, lowered Spain's debt outlook from "stable" to "negative" on Dec.9. S&P, which downgraded Spain's sovereign credit rating in January from tripleA to doubleAplus, blamed the likely downgrade on more prolonged economic weakness and greater deterioration of public finances than previously expected.

Meanwhile, the Spanish government said it was confident of meeting the target set by the European Union for Spain's budget deficit, which is for a reduction to below 3 percent of GDP by 2013, down from an expected 10 percent this year.

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