Moody’s warns it may downgrade Spain’s credit rating

Moody's rating agency says it is considering cutting Spain’s credit rating again because of the country's heavy refinancing schedule and problems in meeting its borrowing needs next year.

Bank of Spain in Madrid © REUTERS

In September, Moody's cut Spain’s debt rating from Aaa to Aa1 and now says it could further reduce the rating.

The possible review has fuelled fears across the eurozone that the debt crisis in Ireland and Greece could spread to other states.

The rating agency cited Spain’s high refinancing need in 2011 as its reason for reconsidering the country’s debt score.

There are “increased concerns over the ability of the Spanish government to achieve the required sustainable and structural improvement in general government finances given the limits of central government control over the regional governments’ finances,” Moody’s said.