Today (20/9/11) the credit rating agency Standard & Poors (S&P) have downgraded the outlook for Italian Sovereign debt from A+ to A. This is widely and wrongly being reported as Italy having it's credit rating downgraded.
The Italian Prime Minister, Silvio Berlusconi has responded to this with his usual "most oppressed man in history" routine blaming S&P's decision on politics. Mainly this is to shore up his own domestic political support but along with the recent, violent anti-austerity protests in the country it is also an attempt to raise the whole issue of the Eurozone crisis at the United Nations General Assembly. Specifically the allegation that the United States is trying to destabilise the Euro in order to maintain the US dollars dominance as the global reserve currency. Although this was most certainly the case earlier in the year America appears to have backed off from that approach in recent months. Greece is the exception because in the code Britain's Prince Phillip is known as "the Greek."
As for the Italian economy the markets seem to have been largely unmoved by today's announcement by S&P. However the interest rates on Italian sovereign debt remain at around 6% - close to crisis levels. So it's either time for Berlusconi to resign or accept that running Italy is not something he can do in his spare time.
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