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Italy downgraded by Standard & Poor's

Italian Prime Minister Silvio Berlusconi addresses a press conference at the end of a summit of the EU heads of State.

Steve Chiotakis: Italy today is slamming Standard & Poor's for downgrading the country's credit rating by another notch. Government officials there say they're working hard to boost the country's economy and reduce its debts.

Isabella Bufacchi is a reporter at the financial newspaper Il Sole 24 Ore and she's with us now. Hi Isabella.

Isabella Bufacchi: Good morning.

Chiotakis: What was the downgrade mostly about?

Bufacchi: Well, funnily enough, the downgrade is about what we already knew -- that Italy's growth is low, is weak, is getting worse. And also that the political situation in Italy is really unstable.

Chiotakis: Did anyone see this coming? I mean, we've been talking about Greece for such a long time, right?

Bufacchi: Yeah, well, actually, last May, Standard & Poor's put our A+ rating on a negative outlook, and also Moody's has got us on review for a possible downgrade. What is I think new is the speed that the Standard & Poor's rating has come because it was announced last May, and we got the downgrade right now.

Chiotakis: And Prime Minister Berlusconi was very defiant, right, in his response -- but what is he going to do, or what can the government do?

Bufacchi: Well the government is saying, we just announced a very big, restrictive budget -- cuts in spending and higher taxes -- and then they're saying, now we're moving on to growth reforms. We have been hearing about reforms for growth for the past ten years -- or actually I would say 20 years. So that's the situation.

Chiotakis: Isabella Bufacchi a journalist at Il Sole 24 Ore in Italy. Thank you so much.

Bufacchi: OK, bye!

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