Spain slams Moody's downgrade as "contradictory"

Feb 14, 2012, 10:25 GMT

Madrid - Spanish Finance Minister Cristobal Montoro on Tuesday criticized as 'paradoxical' and 'contradictory' the decision by the ratings agency Moody's to downgrade Spain's credit rating.

It did not make sense for the agency to issue a positive assessment of the economic reforms the Spanish government was carrying out, while simultaneously downgrading Spain to A3 from A1 with a negative outlook, Montoro told the radio station Onda Cero.

Moody's downgraded six European countries on Monday and changed its outlook on the triple AAA rating of Austria, France and Britain from stable to negative.

Montoro admitted on Tuesday that Greece's problems created 'fairly obvious' risks of contagion for countries like Spain, Portugal and Italy.

It was 'deplorable' that some countries did not adhere to the eurozone's rules on budget stability and social cohesion, the minister said.

The Ibex 35 index of the Madrid stock exchange meanwhile fell by 0.54 per cent after trading started in the morning. The yield for Spanish 10-year bonds rose very slightly to 5.29 per cent after trading opened, compared to 5.23 per cent at the previous sale.

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