As intensely frustrated as I get at the idiocy frequently shown by government here in the US, for truly high handed over the top governmental lunacy we can rarely compete with the Europeans:
This week alone has seen a ratings downgrade for Spain as well as a threat by agencies to review France’s AAA status — and the markets have taken notice. Once again, it would seem, ratings agencies are making things difficult for European countries.
European Internal Market Commissioner Michel Barnier is considering a move to ban the agencies from publishing outlook reports on EU countries entangled in a crisis, according to a report in Thursday’s issue of the Financial Times Deutschland newspaper.
In an internal draft of a reform to an EU law applying to ratings agencies obtained by the paper, Barnier proposes providing the new EU securities authority, the European Securities and Markets Authority (ESMA), with the right to “temporarily prohibit” the publication of forecasts of a country’s liquidity.
The European Commission is particularly concerned about countries that are negotiating financial aid — for example from the euro rescue backstop fund, the European Financial Stability Facility (EFSF), or the International Monetary Fund (IMF). A ban could prevent a rating from coming at an “inopportune moment” and having “negative consequences for the financial stability of a country and a possible destabilizing effect on the global economy,” the draft states.
Ah, European sophistication at its finest! “We have a problem with many of the governments of the European Union being hopelessly in debt and continuing to spend as if they are drunken
American Chinese tourists! Solution, we will ban credit agencies from reporting on the situation! Voila, problem solved!” Brilliant Michel. That should indeed solve the problem except for those individuals who have access to the internet. I assume you have a plan to put that under the supervision of the government of the European Union?