Standard and Poor's downgrades Spain's Canaries

16th December 2011, Comments 0 comments

Standard and Poor's downgraded the credit rating of Spain's Canary Islands on Friday from A+ to AA-, a further danger sign for the country's struggling public finances.

The credit rater also warned the region it was at risk of further downgrades by assigning it "creditwatch negative" status, warning of the burden of its weak finances and high unemployment.

"We expect a further deterioration of the Autonomous Community of Canary Islands' budgetary performance, resulting in a weaker liquidity position," it said in a statement.

Spain has already imposed spending cuts on its regions in its efforts to trim the country's deficit, which is a big worry for the financial markets that lend it money.

Standard and Poor's on December 5 warned Spain and 14 other eurozone members including Germany and France that they faced a possible downgrade of their sovereign debt.

© 2011 AFP

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