Spain rocked by new ratings cut
SPAIN'S financial woes have intensified after a top rating agency slashed its government debt rating by three notches.
The decision represents the most dramatic rating cut by any of the main agencies in relation to Spain since the crisis began.
Fitch's move to cut Spain's rating from 'A' to 'Triple B' is likely to alarm investors -- with experts now warning that a financial bailout of Spanish banks is firmly on the cards.
The agency has gravely warned that the banking sector will need to be recapitalised by as much as €100bn
"The likely cost of restructuring and recapitalising the Spanish banking sector is now estimated by Fitch to be around ¤60bn and as high as ¤100bn in a more severe stress scenario," it said in a statement.
The estimate is more than three times its previous up from its previous estimate of €30bn.
Meanwhile, the new Department of Finance boss has said that any financial assistance for Spain will prompt calls here for Europe to take on €20bn of our loss-making tracker mortgages.
John Moran said that while it would be impossible to say how quickly Ireland could avail of bailout funds to ease its mortgage crisis, officials here must keep a close eye on developments with Spain. He also indicated that the Government could seek assistance to ease the €3.6bn annual price of keeping former Anglo Irish Bank alive.