The news came after panic gripped global markets as a fresh showdown over Greece renewed fears that the eurozone will be plunged into crisis. The rating for Italy, which has Europe’s second-largest debt load, was lowered from A+ to A, S&P said in a statement. The agency said the country's net general government debt is the highest among A-rated sovereigns, and now expects it to peak later and at a higher level than it previously anticipated. “In our view, Italy’s economic growth prospects are weakening and we expect that Italy’s fragile governing coalition and policy differences within parliament will continue to limit the government’s ability to respond decisively to domestic and external macroeconomic challenges,” S&P said in a statement. "The measures included in and the implementation timeline of Italy's National Reform Plan will likely do little to boost Italy's economic performance, particularly against the backdrop of tightening financial conditions and the government's fiscal austerity program." Earlier, as Greece and the bail-out "troika" of the International Monetary Fund (IMF), the European Union (EU) and the European Central Bank (ECB) thrashed out their differences, investors hit the sell button – hammering confidence and threatening the recovery. Greece warned that it is just weeks away from default unless the troika releases an €8bn (£7bn) instalment of its original €110bn rescue. Creditors, though, stressed that they need evidence the country is delivering on its promised spending cuts.
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