Giovedì, 18 Ottobre 2018

Moody's cuts Italy's credit rating


(ANSA) - New York, July 13 - Moody's cut Italy's credit
rating two notches, from A3 to Baa3, saying the country's
short-term economic outlook has 'deteriorated'. Baa3 is just two
notches above junk status.
The news was announced Friday as Italian Prime Minister Mario
Monti was landing in Idaho, United States, to attend the Allen
Conference in Sun Valley alongside the most prominent members of
the US finance world and media.
Monti is attending the conference with the objective of
attracting investment to Italy.
Moody's downgraded the government bond rating saying the
country was likely to see a sharp rise in borrowing costs due to
factors including signs of erosion of foreign investments.
Moreover, the rating agency said, ''the risk of a Greek exit
from the euro has risen, the Spanish banking system will
experience greater credit losses than anticipated, and Spain's
own funding challenges are greater than previously recognized''.
In spite of the Monti government's measures, Italy's
short-term economic outlook has worsened and access to credit
markets could toughen.
Moreover, the political climate heightens the risk that
reforms will not be implemented as national elections scheduled
next spring get closer, Moody's also said.
Weaker growth and higher unemployment create ''risk of
failure to meet fiscal consolidation targets'', Moody's also
Political forces risk endangering a government programme
which could improve growth and the government's balance sheet as
recession looms and balancing Italy's financial budget remains a
major challenge, the rating agency also said.
The news came just hours before Italy, the eurozone's third
largest economy, was due to go to the financial markets to raise
some 5.25 billion euros in an auction of medium and long-term
government bonds.

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