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Spain's credit rating slashed

Credit rating agency Standard and Poor have cut Spain's credit rating by two notches: from A to BBB-. They say they expect the economy to contract further due to a shrinking banking sector and recent austerity measures.

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Spain's recession 'likely to deepen'

Standard and Poor have lowered Spain's long-term credit rating by two notches, saying the country's budget problems are likely to get worse because of the weak economy.

The agency said it was "increasingly likely" that the Spanish government will need to provide further help to the banking sector.

The agency praised the Spanish government's reforms and austerity measures, but said it was unlikely that new jobs would be created in the near future.

The already high unemployment rate especially among the young - will likely worsen until a sustainable recovery sets in,"

– Standard and Poor statement

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