On Dec. 13, 2004, Standard&Poor's Ratings Services raised its long-term sovereign credit ratings on the Kingdom of Spain to 'AAA' from 'AA+', reflecting the sovereign's solid fiscal position and the improved resilience of the Spanish economy. The outlook is stable. Spain has seen a remarkable fiscal consolidation in the past few years. Tight expenditure control, coupled with declining interest payments and strong revenues, have led the general government balance to achieve a surplus of 0.3% of GDP in 2003, compared with a 1.2% deficit in 1999. The 2004 general government balance is estimated at a deficit of 0.7% of GDP, but this is largely due to one-off expenditures. In parallel, the debt-to-GDP ratio has declined rapidly to an
