Eurozone Downgrade | featured news

Fitch downgraded the sovereign credit ratings of Belgium, Cyprus, Italy, Slovenia and Spain on Friday, indicating there was a 1-in-2 chance of further cuts in the next two years.

Financial markets are unlikely to be derailed by mass euro zone downgrades but with Greek debt talks at an impasse, pressure has been loaded on the bloc to shore up its defenses and glimmers of optimism from last week have been firmly doused.

In Spain, the prime minister pledged spending cuts and a banking-system cleanup, while in Italy, the prime minister called for “efforts in favor of growth.”

Monday's euro-zone downgrade warning by Standard & Poor's Ratings Services is a muscular move by a firm that was pilloried for its supposed laxity in the financial crisis. S&P put the long-term sovereign-debt ratings of 15 euro-zone nations, including struggling Italy and Spain, on negative watch. That typically means there is at least a 50% chance of a downgrade within 90 days, but the firm said Monday that it expected to announce any rating changes "as soon as possible" following this week's European Union summit, where policy makers are expected to lay out plans to enforce stricter budget rules.