Skip to content
Subscriber Only
Opinion
Marcus Ashworth

What's the Point in Downgrading Italy's Debt?

A wave of credit-rating cuts isn’t helping during the coronavirus pandemic. Looking at relative, rather than absolute, creditworthiness might be better.

Will ratings agencies ever catch up with the times? 

Will ratings agencies ever catch up with the times? 

Photographer: LAURENT EMMANUEL/AFP

It’s like the 2012 euro crisis all over again, as Europe awaits a decision on Italy’s sovereign-debt rating from S&P Global Ratings after Friday’s market close. The country’s current BBB (negative outlook) is just a couple of notches above the junk-bond category, so there’s plenty of investor interest in what happens. Moody’s Investors Service will assess its rating, which is one notch lower, next week.

It doesn’t make much sense that the finances of one of the world’s largest economies are beholden to Delphic judgments from commercial agencies.