Spain and Italy have been warned to brace for a debt downgrade after a leading rating agency concluded that a ‘comprehensive solution to the eurozone crisis is technically and politically beyond reach’.
The eurozone’s third and fourth biggest economies were warned by Fitch of a downgrade, alongside Ireland, Belgium, Slovenia and Cyprus.
Belgium also saw its credit rating downgraded two notches, to Aa3, by another leading credit agency, Moody’s. It cited sustained deterioration in funding conditions for eurozone countries with relatively high levels of public debt, like Belgium, and new risks stemming from the country’s troubled banking sector.
The downgrade and warnings came as Spain admitted its debts had soared, talks with Greece’s private bondholders stalled and Hungary decided to break off talks with the International Monetary Fund.