Fitch downgrades Belgium, Cyprus, Italy, Slovenia and Spain
28 Jan 2012
Downgrading the sovereign credit ratings of Belgium, Cyprus, Italy, Slovenia and Spain yesterday, credit ratings agency Fitch said there was a 1-in-2 chance of further cuts in the next two years.
The ratings agency said in a statement, that the affected countries were vulnerable in the near-term to monetary and financial shocks.
"Consequently, these sovereigns do not, in Fitch's view, accrue the full benefits of the euro's reserve currency status," it said.
The ratings agency cut Italy's rating to A-minus from A-plus. It cut Spain to A from AA-minus; Belgium to AA from AA-plus. Slovenia's new rating was A from AA-minus and Cyprus was downgraded to BBB-minus from BBB, leaving the small island nation just one notch above junk status.
The rating of Ireland at BBB- was reaffirmed and all the ratings received negative outlooks.
Fitch said it had considered a worsening economic outlook across much of the euro zone against the European Central Bank's December move to flood the banking sector with cheap three-year money and austerity efforts by governments to rein in their debts.