Italy Faces Downgrade, France Likely Safe: Fitch

The head of global sovereign ratings for Fitch, one of the world's premier credit rating agencies, riled up the Italian government Tuesday by saying the country was the pivotal factor on which the European financial crisis hinges, and suggesting its credit rating could be further downgraded.

"Italy is the front line of this crisis," David Riley said at a conference in London, according to various news sources.

The credit rating executive noted the amount of money Italy plans to raise this year, some €440 billion (or $563 based on current exchange rates), would be "daunting" given the current borrowing costs faced by the sovereign, and added the high yields on the country's notes "marked a profound intensification of the crisis." On Tuesday, the yield on Italian 10-year notes was 7.13 percent, over the 7 percent threshold that has historically been considered sustainable.

"Taking out the crisis premium means a credible firewall," Riley said. "At the moment, we don't have that, and that's a serious concern with respect to Italy," he added.

Speaking at the sidelines of the conference, Riley mentioned it was unlikely his company would downgrade France, according to Reuters.

The reaction from Italy's political class was furious.

"It has to be seen as an act of financial terrorism," Margherita Boniver, a parliamentary deputy said, according to the Wall Street Journal, calling Riley's comments a "threat."