"Spain's high level of foreign indebtedness has rendered it especially vulnerable to contagion from the ongoing crisis in Greece"
- Fitch Ratings
Fitch Ratings downgraded Spain's long-term credit rating to BBB from A on Thursday, citing the cost of restructuring and high level of indebtedness.
"The much reduced financing flexibility of the Spanish government is constraining its ability to intervene decisively in the restructuring of the banking sector and has increased the likelihood of external financial support," Fitch said in a statement.
"Spain's high level of foreign indebtedness has rendered it especially vulnerable to contagion from the ongoing crisis in Greece."
"It was inevitable," said David Keeble, head of fixed- income strategy at Credit Agricole Corporate & Investment Bank in New York. "What really matters is the political will to sort things out. Quite clearly Spain is going to need external help."
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