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Credit downgrade

April 28, 2010

The list of European countries with downgraded credit ratings continues to grow, as Spain joins Greece and Portugal.

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More downgrades could be on the way for SpainImage: picture alliance / dpa M

International credit rating agency Standard and Poor's has downgraded Spain's credit rating from "AA+" to "AA" with a negative outlook.

The move comes a day after S&P gave Greece's bonds a junk rating and lowered Portugal's credit rating from "A+" to "A-."

"In our opinion, Spain is likely to have an extended period of subdued economic growth, which weakens its budgetary position," said S&P in a statement.

News of the downgrade drove the euro to a one-year low against the dollar, touching 1.3128 in the afternoon on Wednesday.

Spain's deputy prime minister, Maria Teresa de la Vega, appealed for market calm, saying the government had "a very serious plan of fiscal consolidation and deficit reduction."

Observers believe more credit downgrades are possible amid fears that Greece's debt problems are spreading to other parts of Europe.

mz/DPA/afp/AP
Editor: Susan Houlton

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