This article is from the Wall Street Journal, and it highlights the sinking economies of Spain and Barcelona. With unemployment at a staggering 21.2%, and the Prime Minister dissolving parliament ahead of elections, the outlook is pretty grim in Spain, financially speaking. Please be in prayer that God will use this turmoil to turn people’s hearts to see how empty the Spanish equivalent of the “American Dream” is!
Standard & Poor’s Ratings Services lowered its long-term issuer credit rating on Barcelona one notch, citing Spain’s uncertain growth prospects.
The credit-ratings company downgraded Spain’s sovereign debt one-step to double-A-minus Thursday, citing increasingly unpredictable financing conditions that could squeeze a private sector already pressured by lackluster economic growth.
S&P said Monday it cut Barcelona to double-A-minus from double-A, leaving it three steps below the coveted AAA rating. The outlook is negative.
The credit rater also pointed to the incomplete state of labor market reform, which it believes contributes to high unemployment and expects to remain a drag on economic recovery.
The firm said it could lower Barcelona’s rating again if the economy contracts in 2012, if Spain’s fiscal position significantly deviates from the government’s budgetary targets or if additional labor market and other growth-enhancing reforms are delayed.
A further downgrade of the sovereign debt would also result in a downgrade of Barcelona.
