Eurozone Future to be Decided at the 'Gates of Rome'
Italy is at the forefront of the euro countries that could see their credit ratings downgraded by the end of January, according to Fitch Ratings. Speaking at the Fitch Credit Outlook Conference in London, David Riley, group managing director and head of global sovereign ratings at Fitch, urged the European Central Bank (ECB) to step up its involvement to help solve the crisis.
“The future of the euro will be decided at the gates of Rome,” said Riley. The third-largest eurozone country is considered too expensive to bail out and too big to fail, but it is in the forefront of Europe’s debt crisis.
In a straw poll of delegates, who were asked if they thought Italy would require a rescue package, 44% believed that Italy would need a rescue package but that it would be too expensive, so instead it would need to restructure debt. Forty-one percent said no and 15% said yes.
Although Italy continues to struggle to cope with slowing economic growth and large sovereign debt, Fitch remains confident that the 17-nation eurozone will not break up over the next year.
Riley said the challenge for Italy is to convince investors it has a proper strategy to curtail its spending but also to demonstrate that it has a strategy for economic growth.