Standard and Poor's (S&P) is reportedly set to put all 17 eurozone countries on "credit watch" due to fears over the impact of the debt crisis.
Slovak, Italy, Estonia, Germany, Belgium, Portugal, Finland, Malta, Germany, France, Holland (that's what I call 'em!) ... well you get the idea
We believe that these systemic stresses stem from five interrelated factors:
- Tightening credit conditions across the eurozone;
- Markedly higher risk premiums on a growing number of eurozone sovereigns, including some that are currently rated 'AAA';
- Continuing disagreements among European policy makers on how to tackle the immediate market confidence crisis and, longer term, how to ensure greater economic, financial, and fiscal convergence among eurozone members;
- High levels of government and household indebtedness across a large area of the eurozone; and
- The rising risk of economic recession in the eurozone as a whole in 2012. Currently, we expect output to decline next year in countries such as Spain, Portugal and Greece, but we now assign a 40% probability of a fall in output for the eurozone as a whole.
Spain (Kingdom of) Sovereign Credit Rating AA-/Watch Neg/A-1+ AA-/Negative/A-1+