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Italy government bond rating downgraded by Moody's on concerns over debt, weak economy
Moody's Investors Service has downgraded Italy's government bond ratings to "A2" with a negative outlook from "Aa2," the result of high debt, a weak global economy and political uncertainties that delay corrective action.
While the change moves the rating down three notches, it's still investment grade. Moody's affirmed the short-term ratings at Prime-1.
The action follows the Sept. 19 one-notch downgrade by Standard & Poor's Ratings Services, which cut Italy's long- and short-term sovereign credit ratings to "A/A-1" from "A+/A-1+." That rating is still five steps above junk status. S&P analysts cited weakening economic growth for the nation and higher-than-expected levels of government debt.
The European Central Bank had demanded stiff austerity measures but doubts persist about how serious Italy is about coming to grips with its debt.