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The last big confrontation over the debt ceiling, in August, 2011, ended with an eleventh-hour agreement under pressure from shaken markets and warnings of an economic catastrophe if a default were allowed to occur.
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Telecom Italia's Baa3 senior unsecured and Ba2 subordinatedratings were put on review for downgrade by Moody's late onThursday. That signals that it may be junked within the nextthree months, piling even more refinancing pressure on thecompany that has some EUR28bn of bonds outstanding.
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"They are making it really expensive for maquiladoras to keep growing at the same pace," said Ernesto Ocampo, a tax advisor at Ernst & Young. He said two clients had shelved investments fearing cost projections would rise.
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The Gibraltar issue has knocked the scandal off front pages and given the conservative press in Madrid an opportunity to appeal to patriotic unity. Headlines dominating the front page of the daily ABC in recent days have included: "Gibraltar Swindles Spain" and "Cameron threatens Spain."