ITALY/FILE: Italians unperturbed by rating agency Standard & Poor's downgrade of the country's credit rating from BBB+ to BBB

Record ID: 376782

  • Title: ITALY/FILE: Italians unperturbed by rating agency Standard & Poor's downgrade of the country's credit rating from BBB+ to BBB
  • Date: 10th July 2013
  • Summary: ROME, ITALY (FILE - APRIL 28, 2013) (REUTERS) ITALIAN PRIME MINISTER ENRICO LETTA SEATED AT FIRST CABINET MEETING LETTA SEATED NEXT TO MINISTERS AT ROUNDTABLE VARIOUS CABINET MEETING
  • Embargoed: 25th July 2013 13:00
  • Keywords:
  • Location: Italy
  • Country: Italy
  • Topics: Economy,Politics
  • Reuters ID: LVAAR91JT5G4XRJ8WLTWE4N81H40
  • Story Text: Italians were unconcerned and slightly angered on Wednesday (July 10) after the news that the country's credit rating had been cut once again by Standard & Poor's.
    The ratings agency cut Italy's sovereign credit rating on Tuesday (July 9) to BBB from BBB-plus and left its outlook on negative, citing concerns about prospects for an economy stuck in its worst recession since World War Two.
    "Italy downgraded, treasury furious", "S&P cut rating, Letta: we are under surveillance" and "Accounts at risk, Italy failed", were just some of the headlines running in Italian newspapers on Wednesday.
    But investor confidence did not seem to have been shaken following the cut in rating. Italy's one-year debt costs rose to their highest level since March at an auction on Wednesday.
    The Treasury sold seven billion euros of one-year bills, paying a yield of 1.078 percent, up from 0.96 percent at a similar sale one month ago.
    "Well today it went very well, the auction. Last night's downgrade didn't have a big effect on the sale today but going forward what needs to happen is that the government needs to make structural reforms," explained Reuters correspondent Steve Scherer.
    "S&P made it very clear and that is not going to be very easy. Prime Minister (Enrico) Letta has a government composed of rival factions and one of them is headed by (former prime minister) Silvio Berlusconi who is facing a ruling in a trial coming up and the government is not looking very stable. So big decisions need to be made on behalf of the economy but no one agrees exactly what needs to be done. So that is the big challenge to Italy going forward," Scherer said.
    Most Italians say it is not news to them that the country is suffering economically and voiced their mistrust of the rating agencies.
    "I am not worried at all," said pensioner Vito Lorusso. "As usual these people just do what they want, these rating agencies and those who believe in them. This is nothing new - it will stay the same if we keep taking these slaps without returning them in anyway," Lorusso said.
    "It is always difficult to have a reasonable judgment on these rating agencies. They all play their part in this game of international finance, they are probably all owned by main players. The reality is that we keep paying the consequences for this finance game without truly understanding the motives," said Rome resident Domenico D'Angelo.
    Others expressed a lack of confidence in their politicians to resolve the crisis.
    "I would cancel Italy from the geographical map. I would return to how it was before unification. It's such a mess," said pensioner Savino Giannoni.
    Italy's economy, the euro zone's third largest, has been one of the most sluggish in the world for more than a decade, held back by low competitiveness, a weak political system and a public debt of more than 130 percent of gross domestic product.
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