Eurozone debt warning is ‘completely over the top’: Juncker
The head of the eurozone finance ministers, Jean-Claude Juncker, hit out Tuesday at Standard & Poor's debt downgrade warning for the bloc, saying it was "completely over the top."
“I find it completely over the top and also unfair,” Juncker told Germany’s Deutschlandfunk radio.
Stock markets all across Europe slumped on Tuesday after S&P warned it might cut the ratings of Germany and France and 13 other eurozone members if they continue to dither over a solution to the debt crisis, raising the stakes for a crunch EU summit in Brussels on Thursday and Friday.
“After the very substantial efforts in the eurozone in recent days to get the debt crisis under control… this warning comes as crushing blow,” said Juncker, who is prime minister of Luxembourg, which could also lose its top-notch triple-A sovereign debt rating.
“We are on the way to solving the debt crisis. We’re consolidating, we’re reforming and we’re also reforming the way Europe is governed,” he said.
“It is very surprising to me that this falls out of the sky on the eve of the European summit. It can’t be a coincidence,” Juncker continued, adding: “We should not give the ratings agencies more credit than they deserve.”
The agencies had not foreseen the sub-prime debt crisis in the United States in 2007/2008, and even awarded top-notch ratings to those financial instruments, he argued.
On Monday, French President Nicolas Sarkozy and German Chancellor Angela Merkel had called on Europe’s leaders to agree on strict rules for fiscal discipline at their summit this week, suggesting the EU treaty be rewritten to set uniform tough budget standards across the eurozone.
Juncker welcomed the initiative, saying he hoped “the treaty changes could be signed and sealed by March next year at the latest.”