Credit ratings agency Moody's downgraded Italy's government debt yesterday to just two notches above junk status.
It cited rising unemployment, weak growth, low confidence and a risk of financial contagion from Greece and Spain.
But the the lower rating will do nothing to help an economy already suffering under harsh austerity measures.
Interest rates on Italian bonds hit dangerous levels last week, hitting 6.01 per cent on Friday compared with less than 1.5 per cent for German and US ones.
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