Spain's credit rating downgrade was necessary because of a deepening recession and the uphill battle the country faces in pushing through an unpopular reform program, Moritz Kraemar, managing director for European Sovereign Ratings at Standard & Poor's told CNBC Thursday.
"Politically and socially the reform agenda is very difficult. This
The cut could raise Spanish borrowing costs, which have fallen in recent weeks since the European Central Bank announced its bond-buying program.
Kraemar was critical of the response by euro zone policymakers questioning the group's commitment to solving some of the difficult questions.
Some Northern European countries have opposed the recapitalization of Spanish banks via Europe's new bailout fund. Kraemer questioned the commitment of European policymakers and said the threat could jeopardize bank recapitalization in Spain.
"In principal we had thought that the main plans were in place for a turnaround including the ECB's Outright Monetary Transactions program. These need to be put into place and become effective. We have yet to see them enacted, " he added.
S&P forecasts a recession of 1.5 percent for Spain in 2013, adding that the "growth prospects look fairly dim" for the country.
—By CNBC's Shai Ahmed