FXstreet.com (Barcelona) - In Europe, yesterday investors saw the Spanish government come out to defend itself following the S&P downgrade. Deputy finance minister Jimenez said that he disagreed with S&P’s views that budget cuts could be complicated by regional politics, noting that the regions have agreed to deficit-reduction targets set by Madrid.
Jimenez also disagreed with S&P’s concern with a possible veto by northern EU countries to the transfer of banking debt back to the ESM/EFSF, saying that no final decision has been made on the issue. According to Macro Strategy Analyst J. Reid at Deutsche Bank, “In any scenario, the Spanish banking sector recap would only add around four percentage points to the country’s debt-to-GDP ratios.”
Jimenez also disagreed with S&P’s concern with a possible veto by northern EU countries to the transfer of banking debt back to the ESM/EFSF, saying that no final decision has been made on the issue. According to Macro Strategy Analyst J. Reid at Deutsche Bank, “In any scenario, the Spanish banking sector recap would only add around four percentage points to the country’s debt-to-GDP ratios.”
