Egan-Jones Slashes Italy's Credit Rating

Credit ratings agency Egan-Jones on Wednesday cut Italy's sovereign rating to CCC-plus from B-plus, citing the country's stumbling regional governments, ailing bank sector and pressured economy.

"Italy's independent ability to support its banks is questionable given the country's and banks' weak condition," Egan-Jones said in a statement, noting that the rating carries a negative outlook.

"The country is currently in a recession with economic contraction over the last couple of quarters," it added.

Italy is at the center of the euro zone crisis, with the cost of servicing its huge debts jumping on contagion fears as the situation in Spain deteriorates.

Emblematic of mounting concerns about the country's regional and city governments, Sicily will delay paying salaries to regional parliamentarians and postpone payouts to pensioners until it receives money promised by the central government in Rome.

Standard & Poor's rates Italy BBB-plus, Moody's Investors Service rates the country Baa2 and Fitch rates the country A-minus. All three ratings carry negative outlooks.