Fitch Ratings announced it was cutting the ratings of Italy, Spain, Belgium, Slovenia, and Cyprus.
Italy and Spain, two of the biggest eurozone economies, suffered a two-notch drop. Italy went from A+ to A- and Spain went from A to AA-.
"The downgrades, flagged a month ago by Fitch, come as Greece negotiates with creditors on how to avoid a default and other euro nations struggle to bolster the region's defenses against contagion should those talks fail. While sovereign-bond yields have fallen in Italy, Spain and elsewhere in recent weeks as the European Central Bankadded liquidity, the 17-nation region still lacks the protection it needs for such a situation.
"U.S. Treasury Secretary Timothy Geithner warned European leaders in Davos, Switzerland, on Jan. 27 that the U.S. isn't willing to provide more support unless they act first."
Earlier this month, S&P downgraded France and eight other european countries. In its statement, according to Forbes, Fitch said it took the decision because of the "gradualist approach" the countries were taking to solve their debt issues.
The Wall Street Journal reports that the euro dropped on the news, which came just as the currency had risen to $1.32 for the first time in the new year.
The Journal adds that this news is not as severe as the steps taken by S&P, because it did not take action against France, which maintains its AAA rating.