Italy got hammered Tuesday by Moody’s, which lowered the country’s credit rating from Aa2 to A2, with a negative outlook, citing weak growth as the reason. This followed Standard & Poor’s downgrade of the country in September, a move that had taken the country by surprise, as previously reported by AdvisorOne. It was the first time Moody’s had taken such an action against Italy in almost 20 years.
Bloomberg reported that Moody’s also warned that other less-than-Triple-A-rated countries in the eurozone could find themselves in for downgrades in the ongoing European debt crisis as “a profound loss” in investor confidence pressures their market viability. Of the 17 eurozone countries, 11 carry ratings of less than Triple-A; Austria, Finland, France, Germany, Luxembourg and the Netherlands are the lucky top-graded nations.
In a statement, Moody’s said of the potential for additional eurozone downgrades, “There has been a profound loss of confidence in certain European sovereign debt markets, and Moody’s considers that this extremely weak market sentiment will likely persist. It is no longer a temporary problem that might be addressed through liquidity support, and several euro-area governments are increasingly affected by the loss of confidence.”