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Italy: Audit Court probing rating agencies over downgrades

February 5, 2014

Adnkronos International, Rome

Feb. 05 -- ROME _ Italy's Court of Auditors confirmed Wednesday it was investigating the world's leading international credit rating agencies over a series of downgrades at the height of the eurozone crisis that allegedly failed to take into account Italy's cultural heritage. The 2011-2012 downgrades by Standard & Poor's, Moody's and Fitch resulted in a sharp increase in Italy's risk indicators and contributed to a rise in its borrowing costs, forcing then-premier Silvio Berlusconi to resign. A technocrat cabinet replaced him that enacted a series of tough austerity measures to stave off the threat of a default on Italy's massive sovereign debt. Audit court said the probe was at a preliminary stage, however, and might be shelved and that it was premature to talk of suing for damages. "It is still a preliminary investigation, therefore the case could also be thrown out, after (credit rating) agencies present their explanations and counter-observations," auditors said in a statement. The court's statement came after the London -based Financial Times reported on Tuesday that it could be about to sue Standard & Poor's, Moody's and Fitch for 234 billion euros over the downgrades. The FT said S&P had revealed that it had been notified that the Audit Court might present a claim, partly because the agency allegedly failed to account for Italy's cultural heritage when downgrading the country's rating. "S&P never in its ratings pointed out Italy's history, art or landscape which, as universally recognised, are the basis of its economic strength," the FT quoted the petition as saying. S&P dismissed the claim as "frivolous and without merit", the FT said. Italian economy minister Fabrizio Saccomanni on Wednesday declined to comment on the reports of a possible state lawsuit against the ratings agencies, which he said wielded undue influence. "I believe that today we measure the evaluation that investors give Italy more on treasury-bond interest rates which are falling to very low levels, and by the interest investors have in our privatisation and market-opening activities," he stated. The minister made the remarks at a conference in the southern city of Naples' Federico II University . ___ (c)2014 Adnkronos International (Rome) Visit Adnkronos International (Rome) at Distributed by MCT Information Services

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Source: Adnkronos International (Rome, Italy)

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