To worsen the prevailing debt crisis situation, Fitch reduced Italy's credit rating to A+ from AA- and Spain's credit rating to AA- from AA+.

Whole situation has gone for toss as now, Belgian bonds of 10 year also lowered when the government said that they have considered pros and cons of paying 4 billion euros for consumers of Dexia SA, and have agreed for the deal in which they would pay the loan to assure the lenders. Even, Belgium was of the view that its credit ratings could also be on the check after Italy and Spain.

It appears that the looming sovereign-debt crisis on the European nations has hit the financial market on Friday. Post revelation that the Fitch credit rating agency has downgraded the foreign and local currency ratings on Italy and Spain, the market saw a downfall.

Reports confirmed that UBS AG was seen slumping down by 6.2% to $11.28, and Deutsche Bank dropped by 5% to $35.15.

It financial crunch of Italy has made to surpass Spain. It has been reported by the Standard & Poor that the debt rating of the Italy worse than that of Spain. Moreover, the worst part is the country doesn't have sound political leadership to deal with the growing issue.

Italy and Spain have started their battle against increasing debt crisis. To lead their battle, both the countries have issued some new austerity measures, which according to them, would be serving best to make them win this fight.

Moreover, the upper house of Italy's parliament has also introduced a new austerity package, according to which, the country would be cutting its deficit figures by approximately $70bn i. e. 54bn Euros in the period of next three years.

Problem of debt crisis seems to be taking toll on many countries. But for now, Italy and Spain seems to be quite upset with their governments and in order to revolt, they organized a protest in their respective nations.

In Spain the protest was organized in Madrid, where they want that the government should stop taking any decision which grim the situation while Italy has gone a bit further and has organized a strike for indefinite period against the government ruling in which authorities would make a cut of 65 billion dollars in next two years.

On Monday, a recent survey on business activity has suggested that declined activity in Italy and Spain has played a role to drag the economic growth across the euro-area.

While commenting on economic conditions, an Economist at Markit, Andrew Harker claimed that companies have attempted hard to encourage the demand through output price discounting even than the decline in activity was accelerated during August.

Even the growth of gold and dollar could not control the fall of financial markets and the worst part was that Italian bonds saw decline for consecutive 11th day.

This has put situation in dilemma as on one side European Commissioner Mr. Manuel says everything is fine, but figures at the stock board narrate some different story which is quite depressing. Not only has this, but the defeat of Angela Merkel’s party in Germany also added fuel to the fire and has made the debt condition even grimmer.

During this week, the German bonds were observed to rush forward whereas the Italian bonds have tumbled down for the 10th day while the Spanish benchmark rates have gained a hike of that can be considered as the highest levels.

While commenting on the existing market scenario, the Head of fixed-income strategy at Commerzbank AG in Frankfurt, Christoph Rieger, said that the response to the payroll data has reflected that presently the market is pricing in a feasible environment.

In the recent developments of the Eurozone crisis, it has been revealed that there might be some hope in store for Spain and Italy as they are looking forward to debt auctions. There shall, however, be a careful scrutiny of the markets on as to what costs are going to be borne by the ECB for the support of this cause.

The ECB has contributed by buying as much as 36 billion Euros of the Eurozone debt so far and the major concentration of these purchases has been on Spain and Italy.

Since the last collective contract lasted in June 2010, the conflict between the players and the league is on. Two dates were set by the players for strike during the first half of last season, but both of them were avoided with last-minute verbal agreements.