Italy: note the degraded debt – BFMTV.COM

Standard & amp; Poor’s announced Friday, December 5 have lowered the sovereign rating of Italy from “BBB” to “BBB-”, bringing it to a notch above speculative grade ( junk ).

The rating agency believes that the slow growth of the country and its competitiveness deteriorated jeopardize the sustainability of its huge public debt.

The downgrade is a blow to the Chairman Matteo Renzi, who came to power in February with the aim of the third largest economy out of recession.

However, Standard & amp; Poor’s raised its outlook from “negative” to “stable”, expressed confidence that the government will implement reforms, including fiscal, to promote growth.

Growth downgraded

But the rating agency now provides more than a growth limited to 0.2% next year, while saying anticipate an average annual increase of 0.5% of gross domestic product (GDP) over the 2014-2017 period. When S & amp; P confirmed the rating “BBB” the beginning of June, it had retained the assumption growth of + 1.0% per year over this period. The Italian economy is expected to contract again in 2014 for the third consecutive year.

Some analysts are surprised by the decision of S & amp; P, noting that Italy’s borrowing costs are at a historic low in the prospect of European Central Bank (ECB) to instead a form of quantitative easing. The Italian Treasury declined to comment.

The debt of Italy, which represents 132% of the country’s GDP, the highest ratio in the euro zone after that of Greece, should, according to S & amp; P, reaching 2.256 billion of euros by the end of 2017, 80 billion more than what the agency had expected in June. “Such an increase in debt, combined with a growth remains sluggish and weakened competitiveness are not compatible with a note” BBB, “said S & amp; P

The note of Ireland raised

Standard & amp; Poor’s raised the sovereign rating Friday of Ireland from A- to A, with a stable outlook, and welcoming the country’s economic recovery This decision reflects the robust growth prospects of Ireland says. S & amp;. P in a news The rating agency emphasizes in particular progress on the employment front and improving the health of banks

The stable outlook. adjoining the new note Translated, according to S & amp; P, improved public finances, access to capital markets and the quality of financial system assets

S & amp;. P had been the first rating agency to take off to Ireland the coveted “AAA”, the highest rating possible credit in March 2009 when the country’s financial crisis had accelerated. The agency also was the first to give an “A” to Ireland in June, citing the improved economic outlook.

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