The ratings agency Standard & Poor’s on Wednesday welcomed Spain’s austerity policies, confirming the country’s long-term credit rating at BBB+.

The agency praised Spain’s “strong commitment” to implementing fiscal and structural reforms. However, it kept Spain’s outlook negative, citing “multiple risks” to the country’s economic rebalancing.

Prime Minister Mariano Rajoy’s government recently announced an austerity package worth 65 billion euros ($80 billion), in an attempt to trim the 8.9 per cent budget deficit.

The package includes a rise in value added tax, eliminating public employees’ Christmas bonuses and reducing unemployment benefits.

Spain has also launched reforms of the labour market and financial sector.

The economy is expected to shrink at a rate of about 2 per cent this year, while nearly 25 per cent of the workforce is unemployed.

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