Moody’s Downgrades Italy Credit Rating

Things just keep getting worse in the euro zone: Moody’s has slashed Italy’s credit rating from Aa2 to A2, the BBC reported on Tuesday. Despite low private-sector debt levels in Italy and the government’s low borrowing needs, Prime Minister Silvio Berlusconi said he was braced for the bad news and that a plan to balance the government’s budget by 2013 had been approved by the European Commission. Analysts say the downgrade will likely have a domino effect, with similar credit-rating cuts of Italy’s banks, which will make it harder for the country to borrow money.