[....] The downgrade decision was justified by Moody's on two accounts. First, the low growth of the Portuguese economy, the high budget deficit, and the political uncertainty on the government's ability to change things. But, these problems are years-old news, and nothing in the past week made them look worse. In fact, with recent elections giving 80% of the vote to parties that are committed to the IMF program, and the announcement of a surprise tax hike, the news has been moderately positive on those concerns. The only backing I can find for this Moody's argument is the revision down of growth forecasts and poor numbers on government spending in the first quarter. But these are week-old news. So, at best, Moody's analysis are right, but lazy, taking weeks to digest simple news.Second, Moody's points to the new plan to "voluntarily" restructure Greek debt, and the suggestion that this plan could be offered to Portugal's creditors as well. This makes a lot of sense to me, although the Sarkozy plan is very far from likely being adopted. As Alvaro puts it below, it puts the blame of the downgrade squarely on the EU's too-frequent grand announcements and retreats. But if this European shock justifies a 4-level downgrading of Portugal, how can it not involve an even modest change in outlook for Ireland, Spain or Italy? Again, the only explanation that I can come up with is that Moody is being lazy, and will downgrade those ratings too but only in the next few weeks, when it gets around to it.