Moody’s cuts ratings of six EU countries

Moody?s Investors Service cut the debt ratings of six European countries including Italy, Spain and Portugal, and said it may strip France and the UK of their top AAA ratings, citing Europe?s debt crisis.

Spain was downgraded to A3 from A1 yesterday, Italy to A3 from A2 and Portugal to Ba3 from Ba2, all with negative outlooks. Slovakia, Slovenia and Malta also had their ratings lowered.

?Policymakers have made steps forward but we do not think they have done enough to reassure the market that we are on a stable path,? said Alistair Wilson, chief credit officer for Europe at Moody?s in London. ?What will guide long-term ratings is the clarity and the performance of policy makers and the macro picture.?

The euro weakened against the dollar as investors shifted funds to safer assets after the rating cuts. Moody?s decision highlighted the risk that the European debt crisis will deepen even as the region?s finance ministers prepare to meet on Wednesday to discuss a second aid package for Greece, following the country?s approval of austerity measures.

Still, recent rating reductions have done little to deter investors, who poured money into the government bonds of nations such as France and Austria even after the countries lost their AAA ratings at Standard