Moscow: International ratings agency ‘Fitch’ has downgraded its sovereign credit ratings of Belgium, Cyprus, Italy, Spain and Slovenia while Ratings of Italy and Spain, two Eurozone economic heavyweights were slashed by two notches.

The countries now have the ratings of A- and A, respectively on Belgium, Slovenia and Cyprus were also reduced. The agency assigned Negative Outlook on all five countries, which indicated a 50-percent chance of further downgrade in the next two years.

The move comes after the five countries were placed on Rating Watch Negative (RWN) on Dec 16, 2011. They countries were removed from the list after the downgrade.

"Rising "home bias" in the allocation of capital, the divergence in monetary and credit conditions across the eurozone, and near-term economic outlook highlight the greater vulnerability to monetary as well as financing shocks faced by these sovereign governments," the ratings agency said in a statement.

"Consequently, these sovereigns do not, in Fitch's view, accrue the full benefits of the euro's reserve currency status," the statement reads.S&P, Moody's and Fitch, the world's three leading credit rating agencies, are private companies headquartered in the US. Ratings from Moody's and S&P are considered as mandatory for large debt issuers.