Greece appears to be relatively safe from a downgrading by credit rating agency Standard & Poor’s, which revised its outlook on Italian debt to negative from stable earlier this week, but analysts said the revision sends a strong signal that the Greek government should do more to slim down the country’s high debt. Standard & Poor’s on Wednesday revised its outlook on Italy to negative from stable, citing its persistent large structural deficit and the lack of a well-defined, medium-term fiscal strategy. Italy is estimated to have a budget deficit equivalent to 2.4 percent of national output last year and a debt/GDP ratio of 110.3 percent, the highest in the eurozone. Greece trailed close behind with debt/GDP ratio of 105.8 percent while its budget deficit amounted to 1.3 percent. Greece got off scot free thanks to its «strong fundamentals,» said Alex Manos, London-based analyst at Schroder Salomon Smith Barney. «Greece is poised for above-average growth, a fact acknowledged in recent reports by the European Commission, the OECD and the IMF,» he said. The fact that the Greek government has publicly emphasized its commitment to balancing the budget and trimming debt while the major economies maintained a recalcitrant stand has also helped Greece’s case. Investors are apparently convinced that Greece is not likely to get a rating downgrade. Greek government bonds remained unaffected, with the spread with German government bonds barely changed after S&P’s move on Italy. Manos said upgradings by Moody’s and Fitch, two other prominent rating agencies, last year, are positives for Greece. Nevertheless, S&P’s revision of its rating outlook on Italy sends a message to Greece and other prime candidates such as Germany, France and Portugal on the need to get their fiscal house in order, said Christos Avramides, head of analysis at Proton Investment Bank. «S&P is saying you’ve to put your debt in order. This is something that Eurostat has been saying all summer long, that countries need to put their fiscal numbers in order and not just in nominal but in real terms, too,» he said. While Greece stands in no danger of a downgrading, an improvement in its rating and hence a reduction in borrowing costs, seems a remote possibility. Affirming its ratings on Greece last year – a single A and the lowest in the eurozone – S&P said a rating upgrade would hinge on further progress in privatization, the restructuring of public enterprises and further debt reduction. Avramides thinks an upgrade «is unlikely as we still have a number of problems such as the fiscal deficit, the social security issue and limited progress in structural reforms.» The European Commission this week said Greece has only made partial progress in implementing structural and economic reforms.