Italy And Spain Degraded By Fitch During The Crisis The Euro Area

Eurozone crisis intensified Friday when Spain and Italy have been downgraded by the rating agency Fitch, which increases fears for the health of European banks.

The move ended a three-day rally on Wall Street and wiped out early gains on the stock markets, which came better than expected figures for U.S. employment.

The euro fell against major currencies, the battery of a gentle pressure on European politicians to restore confidence in the single currency. Germany, Angela Merkel said Europe needed to find a solution to their banks on October 17. Capital of economic analysts estimate the total donations could exceed € 200 billion (£ 172bn).

Merkel and Nicolas Sarkozy in France is due to meet in Berlin on Sunday to discuss the crisis, with bank recapitalization should be the focus of their negotiations.

Cut into Italy - Double A-Plus-minus - from voting stroll down to the field three times by appointment. Fitch said the outlook for the country is negative, which increases the cuts are coming. Agency noted that the high debt levels of Italy and the low potential growth of the economy makes it particularly vulnerable to external shocks.

"The downgrade reflects the intensification of the euro area, which is an important financial and economic crisis that weakened the sovereign risk profile of Italy," Fitch said in a statement. "A credible and comprehensive solution of the crisis is politically and technically complex and take time to develop and gain the confidence of investors," the agency said.

Credit ratings of Spain was cut two notches, to double-A less than a double plus, with Fitch blaming government spending, low economic growth and debt crisis Eurozone in the fall.

"Down Grade is based mainly on two factors - the crisis in the euro area and, secondly, the risks of economic stabilization due to the economic performance in some areas, and the downward revision of the Spanish Fitch medium-term growth prospects "he said. Spain was also "particularly vulnerable" to an external shock.

In Italy, Prime Minister Silvio Berlusconi, moved to highlight some of the positive notes in the Fitch report, noting that the agency has completed the candidacy of Italy to stabilize and gradually reduce its debt ratio Gross domestic product was " perfectly possible. "

The director of the Italian central bank, Fabrizio Saccomanni, the general said there was nothing new in the report and that the bodies were after a "herd-like" mentality of decommissioning. Tuesday, Fitch also rival Moody's credit rating cut to Italy. Standard & Poor's cut Italy in September marking.

In the UK, Moody lowered its opinion of 12 banks and savings banks downgraded amid speculation that Europe is preparing for action to strengthen the financial position of banks on the continent for the next weekend. Moody said the dismantling of UK banks was necessary because the government was supporting the bail when they ran into difficulties. "The damage does not reflect a deterioration in the financial solvency of the banking system or the government," said Moody.