Fitch cuts ratings of five eurozone countries

Updated January 28, 2012 11:56:26

Credit rating agency Fitch has downgraded its ratings on five eurozone countries, citing their poor finances and vulnerability to sharp changes in market sentiment.

Fitch dealt full downgrades to Italy, Spain, Belgium, Slovenia and Cyprus, and lowered its outlook on Ireland.

The rating agency hit out at European politicians' "gradualist approach" to systemic reform in the eurozone as Greece teeters on a debt default and the financial turmoil stalls economic growth.

"In Fitch's opinion, the eurozone crisis will only be resolved as and when there is broad economic recovery," the agency said in a statement.

"It is evident that further substantial reforms of the governance of the eurozone will be required to secure economic and financial stability, including greater fiscal integration."

The action comes ahead of a key European Union summit on Monday where leaders will discuss an agreement aimed at resolving the eurozone debt crisis.

Earlier this month, the Standard and Poor's credit agency also downgraded its ratings on nine eurozone countries, including France.

Fitch lopped two notches off the ratings on Italy, Spain and Slovenia, saying that Italy faced too-slow growth against its rising debt and Spain faced "a significantly worsened fiscal and economic outlook."

Italy was downgraded to A-, and Spain and Slovenia to A.

Fitch cut Belgium by one notch to A, and Cyprus to BBB-.

Ireland's rating at BBB was maintained, but Fitch put the country on a "negative outlook," signalling it could suffer a downgrade. The other five countries were already on negative outlook.


Topics: banking, economic-trends, european-union, ireland, slovenia, italy, spain, cyprus

First posted January 28, 2012 10:08:33