The downgrade of Spain reflects our view of mounting risks to Spain's net general government debt as a share of GDP in light of the contracting economy, in particular due to: The deterioration in the budget deficit trajectory for 2011-2015, in contrast with our previous projections, and The increasing likelihood that the government will need to provide further fiscal support to the banking sector. Consequently, we think risks are rising to fiscal performance and flexibility, and to the sovereign debt burden, particularly in light of the increased contingent liabilities that could materialize on the government's balance sheet. These concerns have led us to conclude a two notch downgrade is warranted in accordance with our methodology (see "Sovereign Government Rating Methodology
