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30 Jul, 2010 - Moody's issues warnings for
Spain and the US
Moody's Investors Service announced that
Spain may lose its Aaa credit rating after the country was put
under review last month, and that the US would need a clear plan to
cut its deficit.
Spain's
classification may be lowered by as much as two grades according to
Moody's analysts as the country is trying to tackle one of Europe's
largest budget deficit after a two-year recession. Results will be
announced in the next three months. Standard & Poor's cut
Spain's rating in April.
This reassessment
comes following Greece's downgrade to non-investment grade last
month as Moody's cited "substantial" risks to the country's
economic growth.
The US faces similar difficulties as the nation is trying to
stimulate growth to prevent its debt from threatening its top
rating. Steven Hess, senior credit officer at Moody's voiced his
concerns over the questions about the strength of the country's
economic growth and said that "if economic growth is not there,
then the government's ability to fix its budget problem is less
because the revenue will be less".
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