This was inevitable: How long were European governments going to let American credit ratings agencies push them around?
First, over the weekend, S&P suggested that the latest bailout plan would be called a default.
Then yesterday, Moody’s downgraded Portugal to junk, setting off a new round of PIIGS contagion today.
And now today: José Manuel Durão Barroso, the President of the European Commission, is lashing out (via Bloomberg).
He says it’s “strange” that Europe doesn’t have its own ratings agency, and that the lack of a domestic one may lead to “bias”
He slammed Moody’s for not adding any clarity to the Portugal situation, claiming that the firm is adding a “speculative element.”
So the bottom line is that it’s just a matter of time before the ratings agencies are neutered in Europe.
And realistically, it’s probably a matter of time before they’re neutered in the US, given their warnings about US debt. No government can let private companies push them around like this.