Fitch downgrades credit ratings of some European countries

PanARMENIAN.Net - Fitch downgraded the sovereign credit ratings of Belgium, Cyprus, Italy, Slovenia and Spain on Friday, indicating there was a 1-in-2 chance of further cuts in the next two years, Reuters reported.

In a statement, the ratings agency said the affected countries were vulnerable in the near-term to monetary and financial shocks.

"Consequently, these sovereigns do not, in Fitch's view, accrue the full benefits of the euro's reserve currency status," it said.

Fitch cut Italy's rating to A-minus from A-plus; Spain to A from AA-minus; Belgium to AA from AA-plus; Slovenia to A from AA-minus and Cyprus to BBB-minus from BBB, leaving the small island nation just one notch above junk status.

Ireland's rating of BBB-plus was affirmed.

All of the ratings were given negative outlooks.

Fitch said it had weighed up a worsening economic outlook in much of the euro zone against the European Central Bank's December move to flood the banking sector with cheap three-year money and austerity efforts by governments to curb their debts.

Two weeks ago, Standard & Poor's downgraded the credit ratings of nine euro zone countries, stripping France and Austria of their coveted triple-A status but not EU paymaster Germany, and pushing struggling Portugal into junk territory.

Italian Prime Minister Mario Monti, a technocrat who has won plaudits for his economic reform drive, said he reacted to Fitch's downgrade of Italy with "detached serenity."