RATINGS AGENCY MOODY’S has downgraded the credit rating of six European countries and put three other countries on negative watch.

Italy, Portugal, Spain, Slovakia, Slovenia and Malta all had their ratings cut by the ratings agency. Five of the six had their ratings cut by one notch while Spain had its rating cut by two.

France, the UK, and Austria all have a higher risk of defaulting on their debts according to the US credit ratings agency, which last night said that all three are at risk of losing their AAA ratings.

Ireland’s BA1 rating from Moody’s remained unchanged.

Moody’s said the eurozone crisis was to blame for the adjustments.

The agency cited “Europe’s increasingly weak macroeconomic prospects” and “the uncertainty over the euro area’s prospects for institutional reform of its fiscal and economic framework” as two of the main drivers of last night’s actions.

The negative outlook for France and the UK means that the ratings agency believes there is a 30 per cent chance the countries will see a downgrade in their credit ratings within the next year and a half.

Separately, two other credit ratings agencies  announced downgrades to a number of Spanish banks last night.

Fitch downgraded the credit rating of four of the country’s biggest banks, while Standard & Poor’s said it was downgrading 15 financial institutions based in Spain.

Two ratings agencies downgrade Spanish banks >