WASHINGTON (MNI) – The following is the text of a statement by
Standard & Poor’s Monday on the elections in Spain:
Standard & Poor’s Ratings Services said today that its sovereign
credit ratings and outlook on the Kingdom of Spain (AA-/Negative/A-1+)
are not affected by the outcome of yesterday’s general elections.
Provisional results indicate that the center-right Partido Popular (PP)
party, led by Mariano Rajoy, has won an absolute majority and will be
able to form a single-party government.
In the run-up to the elections, PP announced that among its
priorities in the economic policy area would be the reduction of
outstanding fiscal imbalances along the lines of the existing budgetary
deficit targets (6.0% of GDP in 2011 and 4.4% of GDP in 2012) and taming
Spain’s high unemployment, although it steered away from specifying the
concrete underlying policy measures, which we expect will be unveiled
shortly. In our opinion, the clear majority PP obtained in yesterday’s
election could facilitate frontloaded implementation of reform measures.
Weak economic growth prospects due to ongoing private-sector
deleveraging, high unemployment and labor market rigidities, and
significant net external debt–implying vulnerability to deterioration
in external financing conditions–have constrained the ratings on Spain.
** Market News International Washington Bureau: 202-371-2121 **
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