Merkel calls for European credit rating agency

Merkel calls for European credit rating agency
Photo: DPA
German chancellor Angela Merkel called Sunday for the creation of a European credit rating 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.


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