‘Credit ratings of some nations simply not fair, not real’
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Maintaining that Europe's woes were a result of the 2008 subprime crisis in the US, the ambassadors of Spain, Greece and Portugal on Friday strongly criticised the credit rating agencies for their harsh actions, but were resolute in their belief that Europe's future was tied to the euro.
In an interactive session at Express Adda here, Ambassador of Spain Gustavo Manuel de Aristegui and his Greek and Portuguese counterparts, Ioannis Rapttakis and Jorge Roza de Oliveira respectively, said their countries were pursuing a difficult programme of reforms. The session, co-hosted by Shekhar Gupta, Editor-in-Chief, The Indian Express Group, and K V Kamath, non-executive chairman of Infosys and ICICI Bank, sought to throw light on the difficulties that Europe faces, and life beyond the current crisis.
Rating agencies whose actions have been under a cloud since the collapse of Lehman Brothers were in the line of fire of the three diplomats. "Credit ratings of some of our nations is simply not fair and simply not real. Nobody can say we are about to be downgraded to junk status because it's simply not true," said Aristegui.
Raptakis suggested that Europe should not rely on US-headquartered rating agencies. "Something that we have to blame Europe for is that we have not established a rating company of ourselves and we rely on three America-based rating companies," he said.
Oliveira complained that when Portugal asked for a bailout on April 11, that evening the agencies downgraded its sovereign rating to junk.
While India too faces a risk of downgrade due to inadequate policy reforms and high fiscal and current account deficits, Kamath argued for a united response.