More problems in the happy land of the Euro this morning as Standand & Poor downgrade's Italy’s credit rating.
Italy has the second highest fiscal deficit within the European community and it appears that the government of Silvio Berlusconi is unable to deal with it.
The announcement by Standand & Poor said that the nation's weakening economic growth and political uncertainty have dented its financial stability.
"Italy's fragile governing coalition and policy differences within parliament will likely continue to limit the government's ability to respond decisively to the challenging domestic and external macroeconomic environment." said the agency whose downgrading of the US rating a couple of months ago threatened to spill over into another chapter in the world's economic crisis.
The news could hardly have come at a worst time for the Italian PM who faces growing pressure to resign, after new wiretaps of him boasting about having sex with eight women in one night along with him claiming that he is "only prime minister in his spare time" were released over the weekend.
For Italy which has the eighth largest economy and whose debt exceeds 120 per cent of its GDP and is the world's third largest issuer of debt after the US and Japan,it is not all bad news.Last week it announced that its officials had held talks with China’s $340 billion sovereign wealth fund about buying Italian government bonds.
Meanwhile in the last hour,Mr Berlusconi has blasted the downgrading of his country's debt saying it was more influenced by politics and newspaper reports than by economic reality and the Chinese have joined the party defending Italy's economic management.
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