ROME - Italian Prime Minister Silvio Berlusconi criticized on Tuesday Standard & Poor's downgrading of Italy's credit rating, defending the measures contained in the emergency budget plan recently cleared by parliament.

"This government won a vote of confidence over the budget document, thus demonstrating the stability of its parliamentary majority," said Berlusconi in a statement released by his office, in which he defended Italy' solvability.

S&P on Monday slashed Italy's sovereign-debt rating by one notch and kept its outlook on negative. Now S&P rates Italy's long-term debt at A and short-term debt at A-1, while its outlook is still negative.

The ratings agency said in a release that Italy's fragile governing coalition and policy differences in parliament will likely continue to limit the government's ability to respond to the challenging domestic and external macroeconomic environment.

"The judgment of S&P does not correspond to reality but seems to be dictated by the recent media campaigns based on instrumental political goals," added Berlusconi, who is currently involved in four trials on various charges.

"It is important to point out that Italy has approved measures aimed at reaching budget balance by 2013 and is working hard on initiatives to stimulate productivity, which will bear fruit in the short-medium term," stressed Berlusconi.

The Italian parliament cleared last week a 54-billion-euro budget document in a bid to shield Italy from fears of a debt crisis and reassure world markets following requests of a tighter budgetary discipline by the European Central Bank.