Italy says debt downgrade by Moody's was expected

AP News
Posted: Oct 05, 2011 5:50 AM
Italy says debt downgrade by Moody's was expected

The Italian government says the decision by Moody's to downgrade Italy's government bond rating three notches was expected and insists it is "fully committed" to cutting the budget deficit.

Moody's Investors Service on Tuesday downgraded the bond ratings to "A2" with a negative outlook from "Aa2," citing high debt, a weak global economy and political uncertainties.

A brief statement by Premier Silvio Berlusconi's office said the government's actions to balance the budget have been "positively received and approved by the European Commission."

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The Italian parliament has approved austerity measures to cut more than euro54 billion ($70 million) off of Italy's deficit over three years, although some experts question whether Berlusconi's government has the political bill to see measures through.