Ratings update from Moody`s: `Moody's is......>

ITALY: Ratings update from Moody`s: `Moody's is extending the review for

downgrade on Italy's Baa2 ratings that it initiated on 25 May so as to get

better visibility on the country's policy direction. The rating agency usually

aims to conclude rating reviews within a time frame of three months. However, in

this case, Moody's is extending the time frame pending greater clarity on the

country's fiscal path and reform agenda. It will most likely conclude the review

by the end of October at the latest.`

- `The key drivers for the review for downgrade were (1) the significant risk of

a material weakening of Italy's fiscal strength, given the fiscal plans of the

new government that took office in early June; and (2) the risk that structural

reform efforts may stall, or that important past reforms such as the 2011

pension, or the 2015 labour market reforms, could be reversed.`