X

Moody's Also Drops Italy's Credit Rating

Cites woes with the euro, not Italy itself
By Kevin Spak,  Newser Staff
Posted Oct 5, 2011 8:49 AM CDT
Moody's Also Drops Italy's Credit Rating
Italian Prime Minister Silvio Berlusconi reacts during a session of the Italian parliament on September 14, 2011 in Rome in this file photo.   (Getty Images)

(Newser) – Moody’s followed Standard & Poor’s lead and downgraded Italy’s credit rating yesterday, slashing it from Aa2 to A2 and setting its outlook to “negative,” meaning it envisions more cuts to come. Moody’s said its decision wasn’t based on Italy’s government finances, but on worries about its economic growth and, more importantly, the erosion of confidence in the euro, the Guardian reports.

story continues below

Silvio Berlusconi dismissed the move as “expected,” as indeed it has been ever since S&P’s downgrade. Analysts also expect the news to lead to downgrades for Italy’s banks. “This downgrade will make it even harder for Italy to borrow,” one BBC editor said. “However that is not the worst of it.” If banks also have to spend more to borrow, he explained, it would exacerbate the eurozone banking crisis. (Read more Standard and Poor stories.)

We use cookies. By Clicking "OK" or any content on this site, you agree to allow cookies to be placed. Read more in our privacy policy.
Get the news faster.
Tap to install our app.
X
Install the Newser News app
in two easy steps:
1. Tap in your navigation bar.
2. Tap to Add to Home Screen.

X