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News Summary: S&P downgrades Italian credit

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The Associated Press | July 9, 2013 02:55 PM EST | AP


THE DOWNGRADE: Standard & Poor's Ratings Services downgraded Italy's credit to "BBB" and said further downgrades are possible. The ratings agency said Italy's economic prospects are weakening, and forecast a larger contraction in the country's economy.

THE OVERVIEW: S&P said Italy is having trouble competing with other European countries because its taxes on capital and labor are higher than tax levels on property and consumption, and labor is expensive compared with other EU countries, which hurt growth and make it harder for the country to compete.

THE RATING: The rating is still investment grade, two notches above "junk" status.