FITCH RATINGS AGENCY says it considering downgrading six nations that use the euro — Italy, Spain, Ireland, Belgium, Slovenia and Cyprus — by one or two notches.
Fitch says that following last week’s EU summit, it “has concluded that a ‘comprehensive solution’ to the eurozone crisis is technically and politically beyond reach.”
It expects to complete the review of the countries’ ratings by the end of January.
At the same time, the ratings agency said it is keeping France’s credit grade at Triple-A, but it is revising its outlook on the key eurozone nation to negative from stable.
Fitch says France’s credit grade is supported by the country’s wealthy and diversified economy and noted the government has adopted several measures to strengthen its finances.
It said, however, that France’s debt is expected to rise to a peak of 92 percent of GDP in 2014.
French officials and investors had feared that France could get downgraded, which would have severe repercussions on European efforts to contain the debt crisis. France and Germany’s AAA credit ratings underpin the rating for the eurozone’s bailout fund.
This story is breaking. More on this as it develops…