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Spain criticises Moody’s credit downgrade

Finance Minister Elena Salgado said Thursday she had “differences” with Moody’s downgrade of Spain’s credit rating, which was blamed on banking woes and wayward regional government finances.

Moody’s Investors Service cut the sovereign long-term credit rating by a single notch to “Aa2” and assigned a negative outlook, meaning it could be downgraded again.

The agency expressed scepticism about Madrid’s assumption it can clean up savings banks’ balance sheets at a cost of less than 20 billion euros ($28 billion).

But Salgado said that she had “differences” with Moody’s decision.

The agency’s doubts about the costs of cleaning up banks could have been resolved “simply by waiting until this afternoon for the Bank of Spain to confirm the necessary amounts,” she said.

“From this point on, whoever says we need a different amount should say in which entity,” Salgado said.

The finance minister agreed however that more should be done to control spending by semi-autonomous regional governments.

“Yes, we do have to make greater efforts to control the (public) deficit and this has to be done in particular by the regional governments under our supervision,” she said.