Credit rating of 3 regions cut

 

Fitch Credit Ratings Agency has downgraded a further three Spanish regions earlier today, jus three days after cutting the national rating from AA+ to AA- in concerns over their inability to rein in regional government spending.

The Asturias, Cantabria and Madrid had their rating cut by one level, from AA to AA-, but didn't rule out the possibility that they cut be dropped further still.

This move follows last months move by the agency in reducing ratings for Catalonia, Andalusia, the Canary Islands, Murcia and Valencia after official figures showed most regions missed their deficit targets for the first half of 2011.

A sizeable chunk of Spain's public spending is controlled by the regions, and are key to the Country's efforts to cut its deficit from 9.3% of GDP in 2010 to 6.0% in 2011 in avoiding a bailout from the ECB. The country aims to reach a 3.0% by the end of 2013.

The agency also cut the credit ratings for the Cities of Viga and La Coruña and the Province of Barcelona .