Standard & Poor’s Downgrades Italy’s Credit Rating

This came as a shocker to most of the Europeans, but to say that this was not being expected would be a lie. In fact, most of the European states knew that the downgrade was coming, and had had less of a debilitating effect on the region than the credit downgrade of the US.


Italy’s credit rating had been cut down one notch to A/A-1 by the audit agency, and the action is still being debated all over the country itself as well as Europe. The agency, in a post-downgrade conference, called the downgrade an unfortunate but necessary event considering the almost-absence of any signs of economic resurgence and growth for the country in the short-term as well as the long-term basis!

Italy’s National Reform Plan, which had been carrying much of the nation’s fiscal reform hopes, was talking too long to be implemented, and a spate of scandals and dismal governance from State Premier Berlusconi and the government in totality were some of the main reasons behind the credit downgrade.

Another audit agency, Moody’s, was also set to downgrade the country’s credit rating, but S&P surprisingly became the first agency to do so instead. While the state and the allied fiscal growth prospects is being viewed in poor light due to these changes, the country itself has been positive. A number of experts on research and development tax credits and London accountants say that Italy has the resources to come out of the economic growth stall, and emerge out of the current crisis.

If that shall happen in the near-future, is a fact that remains to be seen.