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Credit rating agency Fitch on Friday downgraded an additional five European Union nations, adding that while the EU's efforts to curb its debt crisis so far have been commendable, more must be done.
The countries downgraded include: Belgium: AA+ to AA; Spain: AA- to A; Italy: A+ to A-;Cyprus: BBB to BBB-; and Slovenia: AA- to A.
"In Fitch's opinion, the eurozone crisis will only be resolved as and when there is broad economic recovery. It is evident that further substantial reforms of the governance of the eurozone will be required to secure economic and financial stability, including greater fiscal integration," the agency said, in comments published online by BusinessInsider.com.
Fitch said its decision was based in part on the agency's assessment that large-scale purchases of sovereign bonds by domestic banks after the European Central Bank conducted its first LTRO in December did not help much, BI.com reported.
"Rising 'home bias' in the allocation of capital, the divergence in monetary and credit conditions across the eurozone, and near-term economic outlook highlight the greater vulnerability to monetary as well as financing shocks faced by these sovereign governments," the agency said in a release.
© 2012 Newsroom America.
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