The ratings on Spain reflect the benefits of what we view as a modern and relatively diversified economy, as well as our opinion of the government's continuing political resolve to deal with the outstanding challenges, as reflected in a significant acceleration in both budgetary consolidation and the structural reform effort since 2010. Moreover, Spain benefits, in our opinion, from its moderate (albeit increasing) general government debt. Nevertheless, we believe that the ratings will remain under pressure from what we deem to be high private-sector indebtedness, challenges to the economy's competitiveness, persistently difficult labor market conditions, and the economy's weak net external financial position. Following the 0.1% contraction in GDP we estimate for 2010, we anticipate that the economy will return
