Spain and Portugal had their credit ratings cut last week in the wake of Greece's spiralling debt crisis but analysts said the fiscal situation in the two countries is far from that faced by Athens.
"Spain and Portugal's capacity to meet their payments is not being questioned," as is the case for Greece, which faces key debt deadlines, Fernando Fernandez, an economist at the IE Business School in Madrid, said. "What is in question is the capacity of the economy of these two nations to grow," he added.
Ratings agency Standard & Poor's on Wednesday lowered Spain's long-term sovereign credit rating to "AA" from "AA+", causing markets to drop on fears the fallout from the Greek crisis was spreading to other parts of the eurozone.
A day earlier it had cut Portugal's long-term credit rating by two notches to "A-" and reduced the Greek rating to "junk" status, making Greece the first eurozone member state to be rated less than investment grade.
"There is no risk that Spain will default on its payments, at least in the short term," said economics professor Josep Martinez Sayeras at Spain's Esade business school.
And Portugal's former finance minister Eduardo Catroga said: "Greece has a problem of short-term liquidity, which makes it difficult to fulfil its debt obligations, while Portugal has a problem of economic growth against a trajectory of unsustainable debt.
"There is a lack of capacity to generate wealth in the coming years to pay the debt," he told Portuguese daily Diario de Noticias.
S&P also revised down its estimate for annual gross domestic product (GDP) growth in Spain between 2010-2016 to 0.7 per cent from one per cent, citing Portugal's sluggish growth prospects.
Spain on Friday reported that its unemployment rate had risen to 20.05 per cent in the first quarter, from 18.83 per cent in the fourth quarter of 2009, with over 4.5 million people currently unemployed.
Analysts point out that both Spain and Portugal have lower public deficits and a lower debt-to-GDP ratio than Greece.
While Greece's public deficit was equal to 13.6 per cent of its GDP last year, in Spain it was 11.2 per cent and in Portugal it hit 9.4 per cent.
Greece's debt-to-GDP ratio is 115.1 per cent, compared to 76.6 per cent in Portugal and just 53.2 per cent in Spain.
"From the point of view of economic fundamentals, one must remember that the situation in Portugal is not comparable to that of Greece, both in terms of its debt and public deficit," said Philippe Sabuco, an economist with French bank BNP Paribas.