Friday, October 20, 2006

Italy: from chic to junk

Economists and bean-counters stole headlines from the celebs in the past day. The big news is not the FilmFest here, but instead the ingnominous position Italy finds itself in these days, credit-wise. S&P and Fitch, two of the big 3 credit agencies, cut their credit rating on Italy. Not good for a country with the third largest national debt on the planet. Italy's credit S&P rating is now A+, worse than Portugal, a country that was on the brink of 3rd world status 15 years ago.

The downgrade means Italy will have to pay out a higher interest rate to bond holders. But that's not exactly enough to motivate this G8 power to get its act together. Politicians instead prefer to point fingers at one another as to who's to blame. In a country of tax dodgers and cheats, the Finance Ministry has its work cut out.

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