Insufficient governance in the eurozone led the ratings agency Standard and Poor's to downgrade the creditworthiness of nine countries, including Italy, Italian Prime Minister Mario Monti says.
The agency's decision "points to inadequate governance within the eurozone as a risk factor", Monti told journalists after a meeting with the European Union's President Herman Van Rompuy on Monday.
Standard and Poor's had warned since December that it might cut the ratings of 15 out of 17 eurozone states.
On Friday, it finally downgraded nine of them, including France, which it stripped of its triple-A rating.
Italy's rating was cut two notches to BBB+, putting it at the lower end of investment-grade debt. Monti noted, however, that Standard and Poor's had also commented "with a lot of emphasis, I have to say, the positive side of ongoing action taken by the Italian government."
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Since taking power in mid-November, Monti has pushed through a draconian austerity plan and is now looking at a massive liberalisation program as well as reforms of the job market. In exchange, the Italian premier is pressing for EU partners to reinforce the eurozone's rescue funds.
Van Rompuy welcomed the "extraordinary work President Monti and Italy is carrying out." Italy is heading in the right direction, said the EU president, before joining the call for emergency rescue funds to be boosted.
"Markets players or rating agencies sometimes consider our response as incomplete or insufficient," Van Rompuy acknowledged.
However, "real progress has been made in reshaping the euro area," he said, pointing out that the bloc "will agree on the new fiscal compact treaty at the end of this month and sign it early March".
The treaty is aimed at tightening budgetary discipline of eurozone member states. Van Rompuy also noted the European Stability Mechanism, which has been designed as a financial backstop for heavily indebted eurozone members, would take effect "earlier than expected" in July 2012.
Financial stability was key not only for the eurozone but for the 27-member European Union as a whole, the EU president stressed.
"This essential goal will not be reached overnight," he noted, adding that "to overcome this crisis, sustained, committed efforts will be required in the future."
The EU president also urged member governments to "refocus on growth and job creation". "We must urgently put in place an anti-recession strategy," Van Rompuy said, before warning that "we must avoid a credit crunch for our economies".
