Standard & Poor’s cut Italy’s credit rating one notch, to 'A' from 'A+', and cut its short-term rating to 'A-1' from 'A-1+'. The rating agency, citing a weak economic outlook, said that its outlook for Italy’s ratings is negative.

Although Italy's downgrade was eminent and expected, it still caused some panic in the already-beleaguered European financial markets. The Italian parliament is supposed to adopt the latest version of its austerity package by Thursday.

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