Italian and Spanish government debt have both been downgraded by the Fitch credit rating agency. Fitch cut Italy’s rating from AA- to A+. Fellow agency Moody’s carried out downgrades earlier this week.
Fitch cited the reason for the action as being the intensification of the eurozone debt crisis and concerns about the strength of Italian banks, particularly in light of the current debt crisis.
Spain’s rating has been cut by two notches, to AA-, the reasons for this being the deepening in the debt crisis in Spain, a perceived in the country’s ability to cut debt levels quickly and poor economic growth prospects.
Spain’s high underlying budget deficit and its fragile economic recovery makes Spain particularly vulnerable to external influences. Spain has the highest unemployment in the eurozone at over 20%.