The rating agency Standard & Poor's late Monday downgraded Italy's credit rating by one level, from "A+" to "A," dealing another blow to the eurozone as it grapples with a debt crisisç DPA reported.
The level could be further reduced, as the outlook was judged to be "negative," S&P said in London.
"The downgrade reflects our view of Italy's weakening economic growth prospects," the S&P said in a statement. Italy's "fragile governing coalition" and differences within parliament would likely continue to limit Rome's ability to respond decisively to the challenge.
On Friday, Moody's rating agency threatened to downgrade Italy despite Rome's newly-agreed austerity package. But it still rated Italy as "Aa2" - a level considerably better than S&*P's "A".
The downgrade means Italy must pay higher interest rates to investors who extend new credit, to compensate for the risk that it may not be able to repay on loans.