Fitch Says Spain Pivotal for Euro Area; Can Drag Region Down

Spain’s ability to navigate its way through the crisis is crucial to the future of the euro area as the currency bloc’s fourth-largest economy has the potential to weaken the whole region, Fitch Ratings said.

“Spain is a pivotal country with the potential to drag the euro zone down again,” Fitch Managing DirectorEd Parker said in Oslo today.

Yields on Spanish debt have started to rise again as investors signal they want Europe’s governments to do more to stem the crisis. While European Central Bank President Mario Draghi’s July pledge to do whatever it takes to protect the euro helped eased the turmoil, concern is now growing that more is needed to address Europe’s bleak economic prospects.

The yield on Spain’s benchmark 10-year bond eased two basis points today to trade at 5.36 percent as of 10:05 a.m. in London. That compares with 4.89 percent on Jan. 11.

Ireland will probably gain access to markets this year, Parker also said.

To contact the reporter on this story: Josiane Kremer in Oslo at jkremer4@bloomberg.net

To contact the editor responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net

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