Sense on Cents

Spain’s credit rating was just cut by S&P from AA+ to AA. The outlook is negative. The Euro just made new 12 month lows to 1.3137 on this breaking news. Why is this news important? The economic contagion is clearly spreading across the EU. Is Ireland next? What about the granddaddy of them all, that being the United Kingdom? Could the pressures within the EU actually cause some countries to leave and the EU monetary union to crumble?

The size of the Spanish economy, which is considerably larger than both the Greek and Portuguese economies, makes these developments very serious. Is there any doubt the domino effect is well underway?

LD

This entry was posted on Wednesday, April 28th, 2010 at 11:49 AM and is filed under Euro, European Union, General. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.