NEW YORK — Moody’s Investors Service on Monday downgraded its credit ratings on Italy, Portugal and Spain, while France, Britain and Austria kept their top ratings but had their outlooks dropped to “negative” from “stable.” Moody’s
said it took the actions because of the uncertainty over EU financial reforms, the region’s weak economic outlook and the resulting pressure on fragile markets.
Government debt ratings can play a major role in countries’ borrowing costs because they often lead to higher interest rates that must be paid to offset investors taking on greater risk.
Moody’s moves were less severe than those taken last month by rival ratings agency Standard & Poor’s, which downgraded nine European countries, including stripping France and Austria of their AAA status. Fitch ratings downgraded Italy, Spain, Belgium, Cyprus and Slovenia last month. The Associated Press
