Fitch takes aim at Europe (Eurocrisis edition)

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FT Alphaville reports that Fitch has gone after a bunch-a European countries.
In particular
  • Belgium went from AA+ to AA (one notch)
  • Cyprus went from BBB to BBB- (one notch)
  • Italy went from A+ to A- (two notches)
  • Slovenia went from A to AA- (two notches)
  • Spain went from A to AA- (two notches)
Per Fitch, the only reason Italy stayed away from BBB territory (therein lies madness! beware! etc.) was that Monti seems to be doing something about reforms, and the ECB is basically providing infinite liquidity for the next three years.
Personally, I don't put much stock in the Monti entertainment - Italy still needs to grow at something like 5% over the mid-term to bring things back into kilter, and, well, that's not going to happen, is it?
So, credit the ECB, which begs the question - What happens in 3 years?  Seriously, Italy has something like $1-Trillion coming due over the next few years.  That isn't going anywhere, so kicking the can down the road three years is, well, kicking the can down the road three years.
Which, in the end, may be the point - A stay of execution means you don't die today...

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