Italy and the eurozone are facing a debt crisis.
Source: Press TV
Moody's credit rating agency has downgraded Italy's government bonds as the eurozone's third largest economy struggles with a burgeoning debt and a faltering economy.
In a statement, the agency said Monday's downgrading of Italy's bonds from “AA2” to “A2” level reflects ongoing economic risks faced by the European country and the eurozone, the Associated Press reported.
Moody's analysts have warned that the rating could even deteriorate further if long-term liquidity support remains uncertain.
"Moody's believes that the structural shift in sentiment in the euro area funding market implies increased vulnerability of this country to loss of market access at affordable rates that is incompatible with an 'AA' rating," the analysts said.
The action follows one-notch similar downgrade by Standard & Poor's (S&P) Ratings Services last month.
S&P analysts have said that Italy's economic growth has weakened and it has higher-than-expected levels of government debt.
The European Central Bank has also demanded harsh austerity measures from Rome. Yet, there are doubts about how serious Italy is about coming to grips with its debt.
The Italian government has announced an austerity package aimed at stopping its debt crisis.
However, the measures have triggered widespread protests and political power struggles within the ruling center-right coalition.