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Fitch: Italy likely to be downgraded by end of January

Sale at shoe shop in Milan
Image caption Dragging its heels - Italy has been slow to cut its debts

There is a "significant" chance that Italy will have its credit rating downgraded this month, an executive at the ratings agency Fitch has said.

David Riley, Fitch's head of global sovereign ratings, cited the lack of a plan to halt the eurozone crisis, coupled with Italy's high debts.

Fitch warned last month that Italy and five other eurozone countries were all at risk of downgrade.

Another Fitch spokesman said he did not foresee a downgrade of France in 2012.

In December the agency revised its outlook on France to "negative" from "stable", meaning a downgrade is possible in 12-18 months.

'Front line'

Italy currently holds an A+ rating. But last month, along with Spain, Belgium, the Irish Republic, Slovenia and Cyprus, it was placed on "credit watch negative" by Fitch, which means it could face a downgrade within three months.

Mr Riley said the agency's reviews of the countries were due to be completed by 31 January.

He said that Italy, the third largest economy in the eurozone, was at the "front line" of Europe's debt crisis.

"The future of the euro will be decided at the gates of Rome," he told reporters in London.

"One thing which would also help Italy, which is outside of its immediate control, is to take out the liquidity crisis premium, which basically means you need to have a... firewall.

"At the moment we don't have that and that's a serious concern with regard to Italy. It's one of the reasons why we have Italy on [credit] watch negative, it's one of the reasons why when we conclude that review, there is a significant chance that that rating will fall."

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