He batted in particular as the leader of BRICS. But hardly had Mukherjee landed back in the Indian capital, news broke that Standard & Poor has lowered India’s sovereign credit outlook to ‘negative’ from ‘stable’. Within hours, bonds fell in Mumbai, stocks declined and the rupee slumped.
It is indeed no surprise that the empire seeks to punish those who challenge it, but the West’s game is far too transparent, far too bereft of finesse to impress anyone. S&P have no serious standing as they are entirely at the service of the Wall Street/City of London gang whose game is reduced to a series of entirely predictable moves which the whole world is learning to counter. Look to the establishment of new rating agencies, perhaps on the basis of Euro-Brics collaboration over the next year or two.
‘What goes up must come down’ is an elementary principle in physics ever since Isaac Newton wrote about the law of gravity. But the variant, ‘The feather in the wind will come to earth’, may in this case be more applicable. From various accounts, Finance Minister Pranab Mukherjee seemed a star performer at the meetings of the finance ministers of the World Bank, IMF and the G24 – and the BRICS, of course – in Washington. Things were looking really good.
With the recent downgrading of the credit ratings of nine euro zone nations by Standard and Poor’s – including the cherished triple-A rank for France – the big three ratings agencies have not been winning new friends.
This GEAB issue makes it six years that the LEAP/E2020 team have shared their anticipations with their subscribers and readers of their public briefing on the development of the global systemic crisis each month. And, for the first time, in the January issue which presents a summary of our anticipations for the year to come, our team anticipates a year which will not result solely in a worsening of the world crisis but which will also be characterized by the emergence of the first constructive elements of the “world after the crisis” to use Franck Biancheri’s phrase from his book « The World Crisis: The Path to the World Afterwards ».
Strong reactions have followed the decision of rating agency Standard & Poor’s to downgrade the overall creditworthiness of nine Eurozone countries, including France.
The multiple European downgrading announced by S&P can hardly be called unexpected and is only dramatic in a rather theatrical sense. The empire has taken on the persona of a “Dennis the Menace” character with an array of wild pranks: celebratory shrieking over the murder of an Arab leader, “taking out” Iranian scientists, NGO street theatre in Moscow, an extra- fraudulent set of monthly employment statistics. S&P’s hit on the Eurozone is well within the range of insanity of the above and is true to form. It is also particularly stupid. The Anglo-Americans may have been scarcely able to contain their glee as they pissed on their erstwhile European allies: but Europe has shown itself to be far from a corpse.
The Portuguese government considers the decision of S&P to downgrade its debt two notches to be “unfounded”, without reflecting either the economic or political reality of Portugal’s counter-crisis measures. Specifically it fails to reflect the consensus within Portuguese society around these measures. A study by MEP Diogo Feio calls for the end to the North American oligopoly of the rating agencies and, like Merkel, the end of legal obligation by investment institutions to take into account their ratings.
É “infundada” a decisão da Standard & Poor’s em baixar o rating nacional em dois níveis, para ‘BB’, uma posição já considerada lixo, diz o Governo português, em reacção à avaliação da agência de notação norte-americana.
German Foreign Minister Guido Westerwelle called the S&P announcement an “artificially produced” setback that emerged just as leaders’ efforts were beginning to bear fruit. In an e- mailed statement, he said he’ll step up efforts with euro-member states to create a European rating company.
Michael Fuchs, the CDU’s ranking floor member for economic issues, said the downgrades were “arbitrary Anglo-Saxon politics that don’t square with the efforts of countries including France” to take aim at state spending.
Chancellor Angela Merkel said euro- area downgrades by Standard & Poor’s reinforce Germany’s stance that European leaders must redouble their efforts to resolve the debt crisis as governments prepare to sell more debt next week.
Meanwhile, in a move to circumvent their influence, Germany’s Merkel backed a proposal to reduce the reliance of institutional investors on ratings agencies, which some of her allies say are politically driven.
The idea would be to introduce legislation to allow institutional investors to evaluate risk themselves and make decisions independent from the U.S.-based agencies.
This is exactly the response required.
Merkel vows faster eurozone reform after S&P downgrades
(Reuters) – European leaders promised on Saturday to speed up plans to strengthen spending rules and get a permanent bailout fund up and running as soon as possible, a day after U.S. agency S&P cut the ratings of several euro zone countries’ creditworthiness.
ROMA – “È un attacco all’Europa”. Così, ufficiosamente, fonti governative italiane commentano la notizia deldeclassamento da parte di S&P 1 di Paesi come Spagna, Portogallo, Austria, Francia e Italia. “Per quanto riguarda il nostro Paese non è stata tenuta in considerazione – spiegano le stesse fonti – l’operato italiano sulla manovra e il lavoro sulle liberalizzazioni”. “C’è una voglia di reagire tutti assieme”, spiegano le stesse fonti. Per questo motivo ci sarà una presa di posizione dell’Eurogruppo. Mario Monti, sottolineano anche fonti ministeriali, intende affrontare la questione lunedì con il presidente del Consiglio, Van Rompuy, per invitare le istituzioni europee ad agire al più presto sul fronte della crescita. La questione del declassamento è stato affrontata dal premier anche nell’incontro con il segretario del Pd, Pierluigi Bersani che ha spiegato come la notizia sconfessi la linea tedesca. Intanto filtrano le prime reazioni del premier italiano: il governo è ancora più determinato ad andare avanti con il programma di riforme stabilito, come riconosce la stessa agenzia Standard e Poor’s nel suo rapporto sull’Italia. E ancora: bisogna promuovere soluzioni a livello europeo per sostenere gli sforzi nazionali in favore della crescita e dell’occupazione. A Palazzo Chigi si leggono positivamente alcune indicazioni contenute nel rapporto di Standard&Poor’s. In particolare l’avviso, a pagina 4, che ci sarebbe un’ulteriore previsione negativa per l’Italia qualora il Governo tecnico non riuscisse ad applicare le riforme necessarie a causa dell’opposizione di gruppi di interesse oppure se la vita del Governo Monti fosse più breve rispetto alla durata del suo mandato. Palazzo Chigi legge anche positivamente il giudizio di S&P sul fatto che “l’indebolimento del quadro politico europeo viene in qualche modo compensato dalla più forte capacità dell’Italia di formulare e applicare politiche anticrisi”.
BERLIN (Dow Jones)–German Finance Minister Wolfgang Schaeuble Friday downplayed the significance of a possible downgrade by Standard & Poor’s of France and Austria.
