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Moody’s Downgrades Italy Debt Rating

Kenneth L. Gentry, Jr. —  Leave a comment

USA Today — Credit ratings agency Moody’s Investors Service has downgraded Italy’s government bond rating two notches on concern that deteriorating financial conditions in Europe will lead to a sharp rise in borrowing costs.

The agency lowered the rating to Baa2 from A3 because it says fragile market confidence and risk of contagion from financial problems in Greece and Spain have increased the risks Italy faces. Moody’s also said it’s worried about a diminished willingness among overseas investors to buy the country’s bonds. The new rating is two notches above junk status.

The downgrade is another blow to a European economy that is flailing from the effects of austerity measures brought on by high government debt. Moody’s says Italy’s short-term economic outlook has deteriorated, as evidenced by weaker growth and rising unemployment.

It was the second downgrade in five months for Italy. Moody’s downgraded the country, along with Spain and Portugal, in February.

Moody’s said the Italian economy is worsening, and that’s also hurting the government’s financial position. The agency projects the country’s economy to shrink by 2% this year, which would make it harder for Italy to meet fiscal targets.

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Kenneth L. Gentry, Jr.

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Ken is a Presbyterian pastor and the author or co-author of over thirty books, most on eschatology. He has been married since 1971, and has three children and several grandchildren. He is a graduate of Tennessee Temple University (B.A., 1973), Reformed Theological Seminary (M.Div., 1977), and Whitefield Theological Seminary (Th.M., 1986; Th.D., 1988). He currently pastors Living Hope Presbyterian Church (affiliated with the RPCGA) in Greer, SC. Much of his writing is in the field of eschatology, including his 600 page book, He Shall Have Dominion: A Postmillennial Eschatology and his 400 page, Before Jerusalem Fell: Dating the Book of Revelation (his Th.D. dissertation). He contributed chapters to two Zondervan CounterPoints books on eschatological issues: Three Views on the Millennium and Beyond (edited by Darrell L. Bock) and Four Views on the Book of Revelation (edited by C. Marvin Pate). He also debated Thomas D. Ice in Kregel's The Great Tribulation: Past or Future? His books have been published by American Vision, Baker, Zondervan, Kregel, P & R, Greenhaven Press, Nordskog, Wipf & Stock, and several other publishers. He has published scores of articles in such publications as Tabletalk, Westminster Theological Journal, Evangelical Theological Society Journal, Banner of Truth, Christianity Today, Antithesis, Contra Mundum, and others. He has spoken at over 100 conferences in America, the Caribbean, and Australia. He is a member of the Evangelical Theological Society and a Church Council Committee member of Coalition on Revival.

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