ONLY three or four small countries in Europe are likely to be left with top credit ratings in three years' time, analysts at US bank Citigroup say.
Even Germany could be on "negative watch" by 2014, as the weight of government debt across Europe takes its toll.
And Britain could lose its top 'AAA' rating if the coalition government breaks up or backtracks on deficit reduction.
"We expect a string of further ratings downgrades for advanced economy sovereign debt, and do not expect any ratings upgrades," says Citi's latest 'Sovereign Ratings Outlook'.
Over the next six months Citi expects agency Moody's to cut the ratings of Italy, Spain, Portugal and Greece, as well as the European rescue fund, the EFSF. This follows the cut in France's AAA rating by rival agency Standard & Poor's (S&P).
"We expect that Moody's will place France and Austria on negative outlook," the report says. "We expect S&P to further downgrade Greece into either 'selective default' or outright default."
Ireland should retain its current rating for some time, but will join the US, Japan, France, Italy, Spain, Austria, Belgium, Finland, the Netherlands and Portugal in being downgraded over the next two or three years.
"For Germany, ratings pressure comes from the slowing economy and the potential burdens of supporting domestic banks and other EMU countries," the report says.
The smaller non-euro members -- Switzerland, Denmark, Norway and Sweden -- are seen as "fairly solid", although Denmark faces some threats.
"Our projection implies that in a few years there may well be very few pure AAAs -- top rated with stable outlook -- just Canada, some smaller European economies, Australia and New Zealand," the report says.