Ratings agency Standard & Poor's agency cut the Netherlands' credit rating on yesterday, reducing the euro zone club of full triple-A nations to just three, while rewarding Spain for efforts to reform its public finances.

S&P lowered the Netherlands, which is suffering from an anaemic economy, slumping house prices and falling consumer confidence, to AA+ from AAA. This left Germany, Luxembourg and Finland as the only members of the 17-nation euro zone with the top rating from all three leading credit agencies.

However, it raised the outlook for Spanish debt to stable from negative and upgraded bailed-out Cyprus, highlighting diverging fortunes within the common currency bloc.

The credit rating agency said it still rated Spanish sovereign debt at triple B minus – only one notch above junk – but that there was now a much smaller chance of a further downgrade in the next two years.

“We see improvement in Spain’s external position as economic growth gradually resumes,” said an S&P statement.

The change comes weeks after Fitch, another credit rating agency, made a similar move, shifting Spain's credit outlook from "negative" to "stable", and adding that the economy was now on a "surer footing".

Both actions reflect growing confidence among analysts and investors that Spain is on a path of slow but stable economic recovery, thanks to a surge in exports and the gradual restoration of competitiveness in the private sector after years of wage restraint and job losses.

S&P said the Dutch decision was due to a worsening of growth prospects. “The real GDP per capita trend growth rate is persistently lower than that of peers at similarly high levels of economic development,” the agency said, while affirming the Netherlands’ short-term debt rating at A-1+.

– Reuters / The Financial Times Limited 2013