Italy goes after ratings agencies over downgrades

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Italy goes after ratings agencies over downgrades

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Italy’s top public finance watchdog has said it is investigating cuts that were made to Rome’s sovereign debt ratings in 2011 and 2012

The ratings agencies Moody’s, Standard and Poor’s and Fitch Investor Service downgraded Italy’s creditworthiness at that time, which prosecutors from the Corte dei Conti audit body has called unjustified.

One reason – they said – was that the agencies had not taken into account Italy’s rich cultural history and the effect that would have on the economy.

The investigation is still at a preliminary stage and will not necessarily result in further action.

The downgrades came during the depths of the eurozone debt crisis and Italy said they had cost the state over 117 billion euros as its borrowing costs shot up.

There was widespread criticism in Italy and elsewhere in Europe at the timing of the moves.

Moody’s and Standard and Poor’s said the allegations were “without merit.” Fitch said it had always acted appropriately and in full compliance with the law.