Moody’s cuts Italy’s rating three notches

Moody’s Investors Service slashed Italy’s government bond ratings by three notches to A2 on the 4 October 2011, citing an increase in long-term funding risks for sovereigns in the eurozone who, like Italy, have high levels of public debt.

The move was Moody’s first downgrade of the country’s sovereign debt since 1993, but followed a recent downgrade by rival rating agency Standard & Poor’s.

The downgrade, while expected, reflected a lack of confidence in Silvio Berlusconi’s centre-right coalition to pass reforms needed to boost Italy’s chronically stagnant economy.

ESO: Background information: S&P downgrades Italy’s credit rating http://www.europeansources.info/record/sp-downgrades-italys-credit-rating/

BBC News, 5.10.11: Italy credit rating slashed by Moody's from Aa2 to A2 http://www.bbc.co.uk/news/business-15176947

EUObserver, 5.10.11: Italian rating hit by Moody’s downgrade http://euobserver.com/19/113830

ESO: Background information: Berlusconi resists pressure to resign http://www.europeansources.info/record/berlusconi-resists-pressure-to-resign/

Corriere della Sera, 5.10.11: Moody’s drives in another nail (via PressEurop) http://www.presseurop.eu//en/content/news-brief-cover/1024291-moody-s-drives-another-nail

---