Italy in the firing line

Markets sank into negative territory this morning, following Standand&Poor’s downgrade of Italy’s credit rating. (Although they have since recovered.) The agency cut Italy’s rating from A+/A-1+ to A/A-1; it also kept its outlook as negative. The agency’s reasoning is hardly surprising: growth is negligible, debt is unsustainable and Silvio Berlusconi’s inert government appears incapable of arresting the crisis.

Most popular

Lloyd Evans

We saw the real Keir Starmer at PMQs – and it was ugly

Frail economics and supine politics, those twinned threats to prosperity, have struck again. The implications to the Eurozone, and the world economy, are obvious. An economist in Nomura’s Sydney office told Reuters, “It only adds to the contagion risk over Greece and has encouraged the flight to safety in markets here.”

Over the past few weeks Greece has been the focus of attention, but the Italian downgrade may alter that. The threat of contagion invariably elicits calls for the introduction of Eurobonds and “ever closer union”, both of which have been almost religiously resisted by Germany for political