Tuesday, 4 October 2011

Don’t try bunga-bunga with Standard and Poor’s!

Italy is the latest country to have its sovereign debt rating cut, further deepening the debt crisis. The rating agency Standard and Poor’s cut Italy’s rating from A+ to A, describing the outlook for the country as “negative.” The agency cited fears over Italy’s ability to cut state spending and bring its finances in order.

Silvio Berlusconi immediately attacked S&P, describing the agency’s actions as being “dictated more by newspaper stories than by reality.” But could there be any link to Berlusconi’s government having already taken action against the agency, with the Italian police raiding the offices of S&P last month?

Berlusconi’s move last week to reduce Italy’s deficit by €54 billion through a raft of austerity measures has done little to boost investor confidence and is increasingly unpopular with Italians, having triggered large street protests in Rome.

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