Onwards and downwards

30 September 2010 By Fiona Maharg-Bravo

Moody’s was the last of the rating agencies to knock Spain’s AAA rating. It did so by just one notch. This should encourage the government to stick to its guns on fiscal discipline, as it sends its austerity budget to parliament. But if growth stalls, it will have to do more.

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Moody's, the credit rating agency, cut Spain's credit to Aa1 from AAA. It was the last of the rating agencies to pull Spain's tripleA ratings. Moody's kept the outlook at stable and said it did not expect to cut again soon thanks to efforts at fiscal reform.

Meanwhile, Spain's parliament was scheduled to start deliberating on Sept. 30 the 2011 budget approved by the cabinet on Sept. 24. It includes higher taxes for the wealthy and a 16 percent cut in ministerial expenditure.

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