EUROPE’S internal markets commissioner Michel Barnier yesterday issued a stark warning to credit ratings agencies, as he demanded an investigation of their methods and floated the possibility of establishing an EU agency tasked with issuing sovereign ratings.
Barnier said he had asked for “responsibility” from the ratings agencies, but that he had been “surprised” by Greece’s rapid deterioration in rating, after Standard & Poor’s last week downgraded the Greek government bonds to “junk” status.
“I think we need to go further to look at the impact of the ratings on the financial system or economic system as a whole,” he added, warning that it could be possible to take away responsibility for sovereign credit ratings from the current agencies in favour of a new EU body.
Barnier’s comments came as Greece was crippled yesterday by the first day of a 48-hour strike by public sector workers against stringent austerity measures to which the country has agreed in return for a €110bn (£94.4bn) EU and International Monetary Fund bailout.
Members of Greece’s communist party hung protest banners on the walls below the Acropolis in Athens before the start of the strikes, which involved tens of thousands of demonstrators. Private sector workers are due to join the walkout today.
Greece has hired Lazard to advise it on its financial woes, though the bank said yesterday that a restructuring of the nation’s debt is not an option on the cards.