Welcome Iain Dale readers.
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Am I missing something here, or is this beyond stupidity?
Two German members of the supposedly liberal ALDE group in the European Parliament:
We cannot leave it to private rating agencies to decide whether Europe is creditworthy. By lowering Greece’s creditworthiness after the country corrected its budget deficit, they further intensified the crisis. It seems that we have yet to learn from the obvious failure of rating agencies during the financial crisis that preceded the crisis in Greece. We have to learn and address the failings of private ratings agencies.
Here’s a plan.
Let’s leave it all to the official agencies in Athens and Brussels who dishonestly or knowingly or negligently have led us into this mess.
So what if private ratings agencies create problems for Greece, the Euro or for anything else.
The reason that happens is that they have established over many years a record for some sort of credible analysis and reliability, so people believe them.
Plus the whole point of freedom is that in the ensuing turbulent ebb and flow of ideas the public get to choose which approach seems to make sense.
No doubt private and public analysts alike got many things wrong when times looked good. Over-optimism is contagious.
But now when things are shown to have been based on dodgy foundations is just the time when we need every piece of analysis we can find.
And if global markets choose to believe the more gloomy ones from private ratings agencies rather than reassuring noises emanating from Brussels and Athens, too bad.
That’s an incentive signal. It shows that Brussels and Athens need to work harder not to get to the point where that pessimism looks to be well justified and/or has consequences.
It’s called Cause and Effect. Not something the plump members of the European Parliament appear to understand.