Fitch Downgrades Five Eurozone Countries

London and Davos: The ratings agency Fitch on Friday downgraded the credit ratings of five Eurozone countries, including Belgium, Slovenia, Cyprus, Italy and Spain. Italy was downgraded from A+ to A- and Spain from A to AA-. Financing and monetary problems facing members of the single currency bloc, is the reason quoted for the downgrade. Fitch issued the ratings ahead of a European Union summit on Monday to discuss ways to put the continent back on a growth trajectory.

Echoing the sentiments, the European Central Bank (ECB) chief Mario Draghi on Friday at the World Economic Forum said that the European debt crisis would continue to burden economies for some time. Risk premiums of European crisis countries might remain on an increased level for a longer period to come, he said at the annual conference in Davos, Switzerland.

He also warned against the negative effects of fiscal austerity measures among eurozone members, as such policies were already stopping growth in several countries.

However, Draghi was more optimistic about financial markets and Europe’s banks. He noted that certain types of trade among banks had picked up since December and that banks had improved their capital base.