Ratings agency Fitch has said it expects its ratings review of six euro zone states to result in downgrades of one to two notches in most of those countries at the end of January.
The six euro zone states that were put on negative watch are Belgium, Spain, Slovenia, Italy, Ireland and Cyprus.
At the time Fitch told the euro zone leaders that it thought a comprehensive solution to the crisis was beyond reach.
Standard & Poor have already cut ratings on some euro zone states earlier this month.
At a Fitch conference in Madrid on Thursday senior director Ed Parker said of Spain that the review would recognise recent efforts taken by the government to cut costs and implement reforms but added that “there are continuing problems with the public finances and bank assets and the labour market is dysfunctional.”
Mr Parker also questioned the governments ability to “control the spending of the autonomous communities.” and warned that, although chances are low, the possibility of a complete breakdown of the euro zone in 2012 could not be ruled out.
On Thursday, however, Spain sold more long-term debt than was initially hoped for meaning Madrid has already covered 19% of it’s funding requirements for 2012.
It also showed that some markets have largely ignored last week’s eurozone rating downgrades from Standard & Poor’s, an impression backed up by a strong bond sale in Paris in which France raised almost 9.5 billion euros.
Spain’s 10-year bond offering raised more than 3 billion euros, exceeding the 4.5 billion target, meaning the Treasury sold a total of 6.6 billion euros (£5.5 billion) of bonds which mature in 2016, 2019, and 2022.