Spain’s ‘Vicious Circle’ Worsens as Moody’s Downgrades Regions

With Spain looking increasingly likely to miss this year’s deficit target, credit rating downgrades for several of its regions, and its borrowing costs showing an uptick things aren’t getting any better for the country, with one analyst telling CNBC that the country is caught in a “vicious circle”.

Spanish newspaper El Confidencial reported on Tuesday that the central bank had written to the European Union explaining that Spain’s government is due to miss its deficit forecast for this year, which currently stands at 6.3 percent of gross domestic product (GDP).

 http://www.cnbc.com/id/49516605

The Spanish economy also contracted in the third quarter by 1.7 percent year-on-year the government reported on Tuesday, compared with a 1.3 percent contraction in the second quarter.