The European Commission said today there was no discussion on a bailout for Cyprus, after Fitch ratings agency said the country may need financial aid from eurozone partners.

"The situation for us has not changed," said Chantal Hughes, spokeswoman for EU Economic Affairs Commissioner Olli Rehn. "No aid plan has been discussed," she said.

Hughes told a news briefing in Brussels that the Cyprus economy was "fundamentally sound" and that while Nicosia had "decisions to take on reforms," there was "no change in the fundamentals."

Her comments came amid a stock-markets downturn pinned on rising expectations of a double-dip global recession fueled by the debt-ridden European and US economies.

Credit rating agencies have shown little mercy on Cyprus, a euro currency island struggling to overcome political and financial turmoil after a July munitions blast knocked out the island's biggest power plant, leading to rolling daily power cuts, economic disruption and public uproar.

Cyprus, which was already struggling to get its finances in order, was left reeling after the explosion, which all but crushed any hopes of economic growth.

Standard & Poor's and Moody's had already downgraded Cyprus, when Fitch did the same on Wednesday.

The government of Cyprus argues recent austerity measures will help see it through this rough patch and that the country will reach the EU's fiscal deficit target next year.