N’S finance minister Elena Salgado insisted her country’s economic situation bore little similarity to the problems in Greece, just hours before Standard & Poor’s (S&P) yesterday issued an audacious downgrade on Spain’s sovereign credit rating.
Addressing the Spanish parliament, Salgado said Spain’s economic data has been showing an “improvement” in recent weeks, adding: “[This] is what distinguishes us from Greece”.
S&P’s one-notch downgrade of Spain to an “AA” rating came a day after the agency had moved Greece’s government debt down to “junk” status and Portugal’s to “A–”, sending tremors through world stock markets.
It came as Greece’s Hellenic Capital Market Commission – the country’s equivalent of the Securities and Exchange Commission – yesterday slapped a two-month ban on short selling of shares on the Athens Stock Exchange in a bid to help stabilise the market.
The move – which is reminiscent of the Financial Services Authority’s decision to ban the practice in September 2008, amid the market turmoil precipitated by the collapse of Lehman Brothers – steadied losses among Greek stocks, which gained 0.6 per cent over the day.
The Greek bank index has plunged 58 per cent since debt woes started to weigh on stocks in October, wiping €28.2bn (£24.4bn) off the country’s bank stocks.
The S&P’s sovereign downgrades yesterday prompted some fears that the UK could also be veering perilously close to losing its top-notch credit rating as contagion from the Greek debt crisis spreads. But the government moved swiftly to quell talk of parallels between the UK and its weaker eurozone counterparts, with foreign secretary David Miliband claiming that “[talking] about Greece and Britain in the same breath is frankly economic illiteracy”.