The threat of a string of sovereign defaults in southern Europe was exacerbated on Tuesday when Standard & Poor's (S&P), a ratings agency, knocked its long-term credit rating for Portugal down by two notches.
The downgrade took Portugal's long-term rating from A+ to A-. The agency also lowered its short-term rating from A-1 to A-2, with a negative outlook. Kai Stukenbrock, a credit analyst at the agency, said the Portuguese government was expected to struggle with its debt servicing burden. "Por