In These New Times

“Altafaj Tardio showed some disdain for the agencies. “Who is Standard & Poor’s anyway?” he said at the European Commission’s daily news briefing.”

It’s gratifying to see that the European Commission has twigged it regarding S&P’s blatant bias in downgrading Greek bonds for the benefit of the dollar and Wall Street. Now they are also downgrading Portuguese and Spanish debt in a strategy that is far too obvious to keep on succeeding. The rating agencies should be facing prosecution regarding their leading role in the subprime fraud rather than pontificating on the fate of nations.

Robert Wielaard, Associated Press

Canadian Business

28th April, 2010

The European Commission ruled out a Greek debt restructuring Wednesday and – with barely veiled annoyance – said it was “monitoring” credit rating agencies such as Standard & Poor’s that downgraded Greek bonds to junk status.

The EU head office stressed it has full confidence Greece’s drive to revamp its dismal public finances and the EU-IMF loans package will ease Athens’ urgent debt crisis.

“Other options are not being contemplated,” said EU spokesman Amadeu Altafaj Tardio. “There is no scenario of debt restructuring. That is not being discussed at the moment.”

On Tuesday, stocks worldwide tanked after Standard & Poor’s downgraded Greek bonds to junk status and downgraded Portuguese bonds two notches.

The rating downgrade also drove down a number of currencies, including the Canadian dollar, as money markets turned to the American dollar for safe haven.

Altafaj Tardio showed some disdain for the agencies. “Who is Standard & Poor’s anyway?” he said at the European Commission’s daily news briefing.

He added the agency should take more account of “realities on the ground,” such as discussions in Athens involving officials from the EU, the International Monetary Fund and Greece “that are making rapid and solid progress.”

EU officials said they are “monitoring” credit rating agencies during the Greek debt crisis. They did not elaborate on consequences, if any.

The EU has drafted a code of conduct for these agencies that takes effect only in December. It aims to erase the chance of conflicts of interests driving credit ratings, ban agencies from providing advisory services and force them to disclose their rating methodology.

EU spokeswoman Chantal Hughes said it was not the European Commission’s job “to say whether the rating given by any one credit rating agency is correct or not.”

But she added, “We would expect that when credit rating agencies assess the Greek risk, they take due account of the fundamentals of the Greek economy and the support package prepared by the ECB, IMF and the European Commission.”

“And we, of course, expect that credit rating agencies, like other financial players, and in particular during this difficult and sensitive period, act in a responsible and rigorous way. We will continue to observe very closely what’s going on,” she added