EU Prepares To Shoot The Messenger

michael barnier european internal market commissioner europe

Photo: Wikimedia Commons

Some officials think that the best way to handle ratings agencies during a crisis is to simply shut them up.European Internal Market Commissioner Michael Barnier is considering a proposal that would allow a new EU agency to “temporarily prohibit” the publication of reports that assess a country’s liquidity, according to a report in FT Deutscheland (via Der Spiegel).

An internal draft of a reform to EU law obtained by the paper would allow EU officials to stop the publication of reports on countries negotiating for aid that fulfil certain “strict” criteria.

Barnier believes that ratings agencies can make inaccurate reports in times of crisis, leading to speculative attacks that catalyze liquidity problems.

It’s unclear how such a move will really help, however, as a moratorium on ratings reports would still signal severe financial distress. Not to mention how much it reeks of censorship.

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