Moody's cut Spain's rating by two notches from A1 from Aa2, with a negative outlook, just days after a similar move from Standard & Poor's.
Describing a now familiar malaise of slow growth and crushing private and public debt, Moody's in effect issued a vote of no confidence in Spain and the European Union's handling of the crisis so far.
"Since placing the ratings under review in late July 2011, no credible resolution of the current sovereign debt crisis has emerged and it will in any event take time for confidence in the area's political cohesion and growth prospects to be fully restored."
"Spain's large sovereign borrowing needs as well as the high external indebtedness of the Spanish banking and corporate sectors render it vulnerable to further funding stress."
Moody's warned that stress would be further exacerbated by slow growth, which would make budget cuts even more painful for whichever government emerges from general elections on November 20.
The Telegraph
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