Merkel calls for European ratings agency

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German chancellor Angela Merkel called Sunday for the creation of a European ratings agency, on the back of recent discontent over the downgrading of some EU economies.

"It is important in the medium term that Europe also has a ratings agency," she said in an interview with public broadcaster ARD.

"The Chinese now have a ratings agency," the chancellor said -- adding the new body should be created by the "European economy" and not by states.

There had not, until now, been much interest in creating such an agency, but there was a void, Merkel continued.

"... I would really welcome it (if) the European economy manages to create a ratings agency," she added.

The European Commission has in recent days roundly criticised the world's three leading credit ratings agencies, questioning the timing of their debt downgrades, which influence prices and interest rates in the sovereign bond market.

Ratings agency Fitch severely downgraded Greece's credit status this week, as the eurozone struggled to contain a debt crisis contagion

Last week another agency, Moody's Investors Service, downgraded the debts of Ireland and Portugal to junk status.

EU leaders object that Standard&Poor's, Moody's and Fitch are an "oligopoly" issuing self-fulfilling prophecies of doom, greatly aggravating the eurozone debt crisis.

The EU's Internal Markets Commissioner has suggested a partial gag to prevent them from grading debt issued by EU economies being rescued with official funds.

There is also an undertone of critical comment that they are based in the United States.

© 2011 AFP

1 Comment To This Article

  • peter lobl posted:

    on 18th July 2011, 20:23:45 - Reply

    nothing like a knee-jerk reaction to make a bad situation worse... sure, credit agencies bungled their mission during the housing bubble.. now, I'd say, they're right on track...
    they may have downgrade US debt as well - so be it!

    So how useful will a European agency be if all it can do is rubberstamp your own groups' proposals and threaten other lands' own debt packages if they dare belittle ours?

    great stuff! and the budget it will get should be a great deal for Euro taxpayers everywhere!!