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Moody's Downgrades Italian Government Debt

Italian Prime Minister Mario Monti pointed at a graph as he spoke during a year-ender news conference in Rome in December.
Italian Prime Minister Mario Monti pointed at a graph as he spoke during a year-ender news conference in Rome in December.
Ratings agency Moody's has downgraded Italy's government bond rating by two notches over concerns that deteriorating financial conditions in Europe will lead to a sharp rise in borrowing costs.

The downgrade, to Baa2 from A3, lowered Italy's rating to two notches above junk-bond status and came just hours before Rome's attempt to raise 5.25 billion euros in a government bond auction.

Moody's projected the Italian economy to shrink by 2 percent this year, which would make it harder for Italy to meet fiscal targets.

Among risks from outside the country, Moody's cited the possibility of a Greek exit from the euro currency union and a worsening crisis among Spanish banks.

Earlier this week, European financial ministers agreed to a 30 billion euro ($37 billion) bailout for Spain's banks.

Based on reporting by AFP and AP
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by: Eugenio from: Vienna
July 13, 2012 09:23
In news related to the financial crisis: Nowadays even the "Washington Post" published articles on the "decling faith of people in capitalism": "The Pew surveys... found that the global economic crisis has eroded support for capitalism. In 11 countries, half or fewer now agree with the statement that people are better off in a free market economy. Such disenchantment is “particularly acute” in Italy, Spain and Poland."
Source: http://www.washingtonpost.com/business/economy/pew-survey-pervasive-gloom-about-global-economy-faith-in-capitalism-falters/2012/07/12/gJQAfazcfW_story.html

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