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Financial ratings, academic rankings, educational qualifications, scientific quantification… partial reports, biased evaluations that are immediately released and often exaggerated in the communications media, and we can’t contrast them with our own evaluation criteria or with results from truly impartial observatories at the local, national or EU level…
As examples, the following recently appeared in the press:
-“Acropolis Now”, is the title of an article published in The Economist on May 1, 2010: “The Greek debt crisis is spreading. Europe needs a bolder, broader solution—and quickly… Germans need to understand the risks to their banking system and their prosperity… Stemming Greece’s debt crisis is less an act of charity than of self-interest... Thanks to extraordinary incompetence, Europe’s leaders have almost ensured that the Greek rescue failed before it began.”
-“Salgado and Ordóñez defend the banking system vis-à-vis market debt. Moody’s believes the sector may need 100 billion Euros in the event of recession. The Bank of Spain explains that and European politicians ‘contribute’ to the markets’ attack on sovereign debt…” (El País, 14 December 2010)
-“Moody’s thinks Spain is vulnerable and threatens to lower its rating” (ABC, 16 December de 2010)
-“In permanent crisis. Moody’s threat to lower the debt rating punishes the delay in reaching an agreement on financial reform” (editorial from El País, 16 December 2010)
--Last year in December it was already being said that “Europe is reacting: positive messages to protect the Euro with additional capital for the ECB and a rescue fund…” “This time is different: it is irresponsible to leave the future of the European Union in the hands of the markets” (José Ignacio Torreblanca, both articles in El País, 17 December de 2010)
-“S&P torments Portugal by lowering its debt to just one step above junk bonds” (ABC, 30 March 2011).
-“S&P puts the U.S. on notice and extends the sovereign debt crisis to the other side of the Atlantic… The agency lowered the country’s outlook to “negative” and threatens to cut its rating if it does not reach an agreement to reduce budget deficits soon” (ABC, 19 April 2011) In its response the U.S. Treasury underscored that S&P underestimates the ability of America’s leaders to come together to address the difficult fiscal challenges facing the nation.
-“Doubts concerning Greece punish Spanish debt and bring downturns in the stock markets” (El País, 19 April 2011)
--It doesn’t matter whether citizens trust their political leaders if the markets don’t: “The markets still don’t trust the Spanish financial system… They don’t trust the figures... They doubt that financial institutions are sufficiently capitalized in view of the weak real estate market and the poor perspectives in that sector” (IDEAL, 20 April 2011)
-“Upheaval in the markets… The markets punish Greece and Portugal” (El País, 22 April 2011)
-“For Greece there’s no other way than to apply strict austerity measures,” declared Jean Paul Trichet. “Greece must privatize 50 billion Euros and cut over 150,000 public-sector jobs”. (El País, 15 May 2011).
-“The Social Democrats have been forced to implement conservative policies” (Manuel Cruz in El País, 15 May 2011)
-“The insatiable greed of speculative markets and rating agencies” (Mario Soares in Diario de Noticias, 17 May 2011). “The EU must urgently amend its development model: if it doesn’t it could face an irreversible downward spiral and even disintegration”.
-“S&P cuts Catalonia’s rating again, due to its high tax debt" (El País, 20 May 2011)
-On 21 May 2011, El País quantitatively expressed “the risk of ‘countries on the periphery’ as the percentage of 10-year bond yields with regard to PIGS: the worst, Greece (16.2%), then Ireland (until recently cited as a “model” in MBA programs) with 10.1%; Portugal with 8.9%; and Spain with 5.5%.
-“Moody’s deals Greece a further three-notch downgrade, given its risk of default” (El País, 2 June 2011)
-“The EU and the IMF will provide a second rescue to save Greece from bankruptcy” (ABC, June 2011)
-“The European Parliament proposes ending the rating agencies’ oligopoly” (Público, 7 June 2011)
-“Moody’s affirms that Catalonia puts Spain’s deficit target at risk. The agency believes that the central government lacks the ability to enforce discipline on the regions” (El País, 7 June 2011)
-Yesterday, July 7, on the front page of El País: “Europe raps rating agencies after Portugal downgrade. The EU accused them of fueling speculation and anti-European bias; the debt premium has soared to highs in the weaker euro-zone states”.
-Also in yesterday’s El País, there was an article entitled “Confidence Betrayed: Moody’s unfair downgrading of Portugal renders the creation of a European rating agency imperative”.
-Yesterday Público underscored: “Brussels alleges that the rating agencies are fueling speculation. The German Finance Minister calls for limiting the agencies’ oligopoly; UGT accuses these institutions of “revenge” and CCOO affirms that they represent very important interests in the financial sector”.
-And today, 8 July 2011, Público published the following: “Suspicious ratings… To regain institutional confidence, strong measures must be taken against these agencies” (B. Boye) In the same newspaper, “Montoro defends the rating agencies”…
-In El País, “The ECB supports Portugal against the rating agencies. The markets appear to be the greatest enemy of popular sovereignty, which is the foundation of democracy”…
Who is the “rater” behind these agencies, who issues these ratings as he pleases?
--The foundation of democracy! We’ve even included the “markets” in our constitutions (Article 38 of the Spanish Constitution)… and now we’re complaining. And not even the EU dares to reject the rating agencies because the “markets” won’t tolerate such insubordination…
This has gone too far! As I like to repeat, the European Union must urgently apply the “creative efforts” extolled by Robert Schumann in 1950 when establishing the foundations for the Treaty of Rome. Creative efforts in economics, in labor, in autonomy, defense and security, in the creation of our own rating and monitoring institutions, as warranted, in order to strengthen democracy… which is founded on the voice of the people. And the voice of the people is now being heard…
As examples, the following recently appeared in the press:
-“Acropolis Now”, is the title of an article published in The Economist on May 1, 2010: “The Greek debt crisis is spreading. Europe needs a bolder, broader solution—and quickly… Germans need to understand the risks to their banking system and their prosperity… Stemming Greece’s debt crisis is less an act of charity than of self-interest... Thanks to extraordinary incompetence, Europe’s leaders have almost ensured that the Greek rescue failed before it began.”
-“Salgado and Ordóñez defend the banking system vis-à-vis market debt. Moody’s believes the sector may need 100 billion Euros in the event of recession. The Bank of Spain explains that and European politicians ‘contribute’ to the markets’ attack on sovereign debt…” (El País, 14 December 2010)
-“Moody’s thinks Spain is vulnerable and threatens to lower its rating” (ABC, 16 December de 2010)
-“In permanent crisis. Moody’s threat to lower the debt rating punishes the delay in reaching an agreement on financial reform” (editorial from El País, 16 December 2010)
--Last year in December it was already being said that “Europe is reacting: positive messages to protect the Euro with additional capital for the ECB and a rescue fund…” “This time is different: it is irresponsible to leave the future of the European Union in the hands of the markets” (José Ignacio Torreblanca, both articles in El País, 17 December de 2010)
-“S&P torments Portugal by lowering its debt to just one step above junk bonds” (ABC, 30 March 2011).
-“S&P puts the U.S. on notice and extends the sovereign debt crisis to the other side of the Atlantic… The agency lowered the country’s outlook to “negative” and threatens to cut its rating if it does not reach an agreement to reduce budget deficits soon” (ABC, 19 April 2011) In its response the U.S. Treasury underscored that S&P underestimates the ability of America’s leaders to come together to address the difficult fiscal challenges facing the nation.
-“Doubts concerning Greece punish Spanish debt and bring downturns in the stock markets” (El País, 19 April 2011)
--It doesn’t matter whether citizens trust their political leaders if the markets don’t: “The markets still don’t trust the Spanish financial system… They don’t trust the figures... They doubt that financial institutions are sufficiently capitalized in view of the weak real estate market and the poor perspectives in that sector” (IDEAL, 20 April 2011)
-“Upheaval in the markets… The markets punish Greece and Portugal” (El País, 22 April 2011)
-“For Greece there’s no other way than to apply strict austerity measures,” declared Jean Paul Trichet. “Greece must privatize 50 billion Euros and cut over 150,000 public-sector jobs”. (El País, 15 May 2011).
-“The Social Democrats have been forced to implement conservative policies” (Manuel Cruz in El País, 15 May 2011)
-“The insatiable greed of speculative markets and rating agencies” (Mario Soares in Diario de Noticias, 17 May 2011). “The EU must urgently amend its development model: if it doesn’t it could face an irreversible downward spiral and even disintegration”.
-“S&P cuts Catalonia’s rating again, due to its high tax debt" (El País, 20 May 2011)
-On 21 May 2011, El País quantitatively expressed “the risk of ‘countries on the periphery’ as the percentage of 10-year bond yields with regard to PIGS: the worst, Greece (16.2%), then Ireland (until recently cited as a “model” in MBA programs) with 10.1%; Portugal with 8.9%; and Spain with 5.5%.
-“Moody’s deals Greece a further three-notch downgrade, given its risk of default” (El País, 2 June 2011)
-“The EU and the IMF will provide a second rescue to save Greece from bankruptcy” (ABC, June 2011)
-“The European Parliament proposes ending the rating agencies’ oligopoly” (Público, 7 June 2011)
-“Moody’s affirms that Catalonia puts Spain’s deficit target at risk. The agency believes that the central government lacks the ability to enforce discipline on the regions” (El País, 7 June 2011)
-Yesterday, July 7, on the front page of El País: “Europe raps rating agencies after Portugal downgrade. The EU accused them of fueling speculation and anti-European bias; the debt premium has soared to highs in the weaker euro-zone states”.
-Also in yesterday’s El País, there was an article entitled “Confidence Betrayed: Moody’s unfair downgrading of Portugal renders the creation of a European rating agency imperative”.
-Yesterday Público underscored: “Brussels alleges that the rating agencies are fueling speculation. The German Finance Minister calls for limiting the agencies’ oligopoly; UGT accuses these institutions of “revenge” and CCOO affirms that they represent very important interests in the financial sector”.
-And today, 8 July 2011, Público published the following: “Suspicious ratings… To regain institutional confidence, strong measures must be taken against these agencies” (B. Boye) In the same newspaper, “Montoro defends the rating agencies”…
-In El País, “The ECB supports Portugal against the rating agencies. The markets appear to be the greatest enemy of popular sovereignty, which is the foundation of democracy”…
Who is the “rater” behind these agencies, who issues these ratings as he pleases?
--The foundation of democracy! We’ve even included the “markets” in our constitutions (Article 38 of the Spanish Constitution)… and now we’re complaining. And not even the EU dares to reject the rating agencies because the “markets” won’t tolerate such insubordination…
This has gone too far! As I like to repeat, the European Union must urgently apply the “creative efforts” extolled by Robert Schumann in 1950 when establishing the foundations for the Treaty of Rome. Creative efforts in economics, in labor, in autonomy, defense and security, in the creation of our own rating and monitoring institutions, as warranted, in order to strengthen democracy… which is founded on the voice of the people. And the voice of the people is now being heard…
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