Italy downgraded by Fitch Rating

Along with Italy, also Spain, the Irish Republic, Slovenia, Belgium and Cyprus, were placed on 'credit watch negative' by Fitch last December, meaning that they could all soon face a credit rating downgrade.

Italy, which had already been downgraded by Fitch last October, is Eurozone's third largest economy: German Chancellor Angela Merkel and French President Nicolas Sarkozy have repeatedly said that a debt collapse in Italy would be the end of the euro as it would stall the process of European integration with consequences hard to predict.

Fitch Ratings said one thing that could help Italy is an insurance in the event of a liquidity crisis, which basically means that Italy needs a firewall.

On Wednesday Italian Prime Minister Monti was in Berlin for talks with Angela Merkel.

Earlier on, during an interview with a German daily, the Italian prime minister had also warned about the growing anti-European Union sentiment in his country.

Germany and France are taking a dominant role in Europe and Monti has expressed is concern about that.

It will take time and effort before Europe finds its new political and economic balance after the financial crisis that hit the global markets. If in the new setup Italy will still play a highly influential role as it used to do, remains in doubt.