Moody's on Friday cut Belgium's credit rating by two notches, citing tough conditions for in-debt European countries to borrow with little chance of a quick end to the eurozone crisis. Moody's cut the rating to Aa3, with a negative outlook, from Aa1. The firm also cited "increasing medium-term risks to economic growth" due to ongoing deleveraging in the eurozone. "The first driver underlying Moody's decision to downgrade Belgium's debt rating is the fragile sentiment surrounding sovereign risk in the euro area," the agency said. "The fragility of the sovereign debt markets is increasingly entrenched and unlikely to be reversed in the near future," it said. Moody's also warned over the Belgian government's potential exposure to liabilities from Dexia, the troubled bank. Belgium, France and Luxembourg decided in October to dismantle Dexia with Belgium agreeing to pay 4.0 billion euros ($5.2 billion) to nationalize its domestic retail unit. The move is the latest in a slew of ratings downgrades to hit European sovereigns and euro area banks.