SPEAKING in Madrid on Thursday, Fitch senior director Ed Parker said the agency was likely to cut the ratings of six euro nations by one or two notches by the end of this month.
Fitch, the third-largest rating agency, placed Belgium, Cyprus, Ireland, Italy, Slovenia and Spain on credit watch “negative” in mid-December, signalling the possibility of a downgrade within three months. At that time, Fitch said that the absence of a “comprehensive solution” to the region’s debt crisis was the reason for placing the six countries’ ratings on credit watch negative.
Cyprus has a BBB rating from Fitch.
Last week Cyprus was downgraded by ratings agency Standard & Poor’s along with eight other European countries. As a result, France and Austria lost their coveted AAA rating, while Cyprus was downgraded to junk status.
In response to that downgrade, Finance Minister Kikis Kazamias said that Standard & Poor’s decision on Cyprus was arbitrary and unsubstantiated and that the ratings agency had acted in a high-handed manner.
On Thursday Fitch’s Mr Parker, who was speaking at a conference in Madrid, said that the review would be concluded by the end of January.