The Standard and Poor’s agency downgraded Italy’s debt rating last week, adding tension
to an already stressful European financial situation. The ratings agency cites fears
over Italy's ability to cut state spending and return public finances to health, given
its low growth prospects. Italy’s Prime Minister, Silvio Berlusconi responded to the
news with a statement saying that Standard & Poor's decision to downgrade its unsolicited
ratings on Italy did not reflect reality and said his government is already preparing
measures to spur growth. The Italian development comes as Greece remains in talks
with the IMF and the EU over steps to secure the latest tranche of its bail-out funding.
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