S&P cuts Netherlands top credit rating, upgrades outlook for Spain
Dutch finance minister Jeroen Dijsselbloem said the downgrade was "disappointing"
Friday 29 November 2013
Standard & Poor's has stripped the Netherlands of its coveted triple-A credit rating while rewarding Spain's efforts to cut its debt with an improved outlook.
The decision to cut the Dutch from AAA to AA-plus leaves Germany, Luxembourg and Finland as the only countries in the currency bloc with the top credit rating.
Meanwhile Spain’s moves to reform public finances were rewarded with an improved outlook by the agency to stable from negative, but the decision to cut the Dutch from AAA to AA-plus leaves Germany, Luxembourg and Finland as the only countries in the currency bloc with the top credit rating.
S&P took the decision as it said the Netherlands’ rate of GDP growth per head was “persistently lower than that of peers at similarly high levels of economic development”. Fitch and Moody’s still give the country a triple-A rating.
The Dutch have been forced into several rounds of cuts to meet the European Union’s target of a 3 per cent deficit for its members.
The Dutch economy grew just 0.1 per cent in the third quarter while the eurozone slowed close to stall speed. France slipped back into recession and growth in Germany is also slowing.
Spain meanwhile gained more breathing space from international markets today as S&P praised rising exports and harsh economic reforms had improved its prospects as growth returns.
Spain’s benchmark borrowing costs, which soared above 7.5 per cent in the summer of 2012, eased today to 4.1 per cent.
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