FTSE100 falls to lowest level since September 2009
The UK stock market today fell to its lowest level since September 2009 amid concerns that Spanish sovereign debt might be about to be downgraded by ratings agency Moody. The agency has given notice that Spain's AAA sovereign debt rating is on "possible downgrade" watch, something which has obviously unnerved markets in Europe and beyond.
This comes at a time when the Spanish government is ready to implement a number of austerity measures which would drastically reduce the budget deficit and at least move towards stabilising the country's debt issue. However, it would appear that credit rating agencies still have various issues with the Spanish economy, government budgets and sovereign debt which could yet impact upon other European nations.
The last thing we need at the moment is further concern in the European debt markets which could, and are likely to, push up financing costs for European countries. While Spain is in the spotlight at the moment there are a handful of other European economies also attracting the attention of credit rating agencies. If the Spanish economy was to collapse and the European Union and the IMF were forced to put together a bailout package there are concerns about how this would be funded and how successful this would be.
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