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Maurice Verrelli analysis Moody's International rating agency yesterday stated, it could be re-cut the credit rating of Spain. Maurice Verrelli thinks This schedule is based on the severity of the country's refinancing and loan problem next year.
Last September, Moody's lowered the Spain rating from Aaa to Aa1. This fact it put pressure on Madrid and the broader euro zone for fear of widespread decline. Moody's said, the ability of Spain to settle the debt does not doubted. Meanwhile, Matador State also does not require external assistance, such as Ireland and Greece.
However, future funding needs, including heavy, so likely will create new tensions in the money market. According to Moody's, another problem related to Spain's rating is likely higher costs of recapitalization of the banking system are estimated to increase the public debt and add to concerns of its citizens.
"Regarding whether the central government to push through reforms, Moody's believes that the weakness of the Spanish warrant puts rating under review for a decline," said Spain's leading analyst Kathrin Muehlbronner in a statement quoted by AFP.
He added that Moody's would also like to emphasize that the continuation of the views against Spain because of the credit is more powerful than any other country in the eurozone. Moody's said the rating review will focus on the Spanish central government commitment to address the structural challenges of the Spanish economy.
"However, I think Moody's review is likely to conclude that the rating of Spain remain in the Aa range," said Muehlbronner.
In its report Moody's estimates, the Spanish Government needs to increase the reserve fund of about 170 billion euros (USD225 billion) in 2011. The amount is included for regional needs to reach 30 billion euros and the banks 90 billion euros. Increased funding needs of Spain in the next year due to increased challenges and still fragile confidence in international financial markets.
"Latest speculation, Spain may have to seek assistance from the European Union and the International Monetary Fund," said Moody's.
As is known, Greece received bailouts from the European Union and International Monetary Fund / IMF amounting to 110 billion euros in May. At that time, the financial markets nearly collapsed because, trust in the euro zone slumped due to inability to raise fresh funds.
The problem for bond yield prices are so high that prompting fears of failure. Meanwhile, the Irish EU and the IMF rescued earlier this month with the help of 85 billion euros. After that, European financial markets are also shocked the high deficits of other countries such as Portugal and Italy.
"Spain is expected to raise the necessary financing. However, they are constantly higher funding costs would strain affordability of debt, "said Moody's.
In another part, Chairman of Finance Ministers from eurozone Jean-Claude Juncker stated yesterday, will propose the existence of a common bond all over Europe at the European summit this week, though Germany objected. "I'll talk about it if there is a chance," he said.
