Europe 'more exposed' in next downturn, Moody's warns

LONDON (AP) — In a bleak assessment, credit ratings agency Moody's warned Tuesday that Europe remains highly vulnerable to another economic downturn despite all its fire-fighting efforts over the past few years.

The Moody's report, published as Italian stocks and bonds were falling over the populist government's spending plans, said Europe "is not ready to cope with another major slump stressing the financial system."

It noted five vulnerabilities that could deepen the impact in Europe of the next downturn, including higher debt levels, peaking assets prices and regulatory risks.

"Overall, the amount of wiggle room available to mitigate the impact of another downturn is shrinking," said Paolo Leschiutta, senior vice president at Moody's.