Moody's Downgrades Spain as Ireland Reveals Bailout Price Tag
Moody's sees Spanish growth of about 1% per year on average over the next few years, the agency said. That's less than the growth it expects for the U.K. or Germany, and less than the Spanish government's own projections for growth of 1.3% next year, 2.5% in 2012 and 2.7% in 2013.
Meanwhile, Ireland disclosed Thursday a "horrendous" price tag -- as Finance Minister Brian Lenihan put it -- of nearly €40 billion ($54.33 billion) for bailing out its distressed banks and said it would have to make more drastic budget savings.
Reuters reported that Ireland's central bank estimated the worst-case cost of winding down nationalized Anglo Irish Bank at €34 billion.
While the euro fell vis-a-vis the dollar, overall, financial markets reacted calmly and bonds rallied as some investors anticipated a two-grade cut for Spain's debt, while traders said a bill of up to €35 billion for Anglo Irish had been priced in.