Spain downgrade reinforces debt crisis fears
Friday, April 27, 2012 @ 3:06 PM
Spain's economic problems were put in sharp relief Friday as figures showed unemployment is near 25 percent, a day after a credit ratings agency downgraded the country's debt rating and warned it faces an uphill battle to get a grip on its finances.
Official figures showed that unemployment has spiked to 24.4 percent in the first quarter of 2012 -- the highest rate in the 17-country eurozone -- from 22.9 percent in the fourth quarter of 2011. It said another 365,900 people lost their jobs in the first three months of the year, taking the total unemployed to 5.6 million.
The figures represent another blow to the conservative government after Standard & Poor's late Thursday became the first of the three leading credit rating agencies to strip Spain of an A rating. It cited a worsening in the budget deficit, worries over the banking system and poor economic prospects for its decision to reduce the rating by two notches from A to BBB+.
S&P even warned that a further downgrade is possible as it left its outlook assessment on Spain at "negative."
Read more at businessweek.com