Main focus of Monday, January 16, 2012

S&P distrusts euro countries

The downgrading caused a global drop in share prices. (© dapd)

The rating agency Standard & Poor's lowered the credit rating of nine euro countries on Friday, with France and Austria losing their triple-A status. This is an attack on attempts to bail out the euro, some commentators write, while others praise the agencies as a corrective that will protect Europe from further indebtedness.

Welt am Sonntag - Germany

The downgrading of the credit rating of nine Eurozone countries is above all the result of the dishonest politics of the Europeans since the outbreak of the financial crisis, writes the conservative Sunday paper Welt am Sonntag: "Practically all European politicians have allowed themselves to be guided by two leitmotifs in the past three and a half years. Firstly, as few impositions as possible are to be placed on the voters, and any inevitable impositions are kept secret as long as possible. Secondly the blame for all the problems is laid on third parties - either the banks, the speculators, the rating agencies, the Americans or a combination of theses. Or simply the markets, those amorphous 'monsters' (quote: Horst Köhler) [former German president]. ... It would almost be a good thing if the oft called-for European rating agency were now established. It would either give the same kind of ratings as the three US market leaders or enslave itself to the dictates of the politicians. ... In both cases those in charge in Berlin and Paris, Madrid and Roma would have one excuse less." (15/01/2012)

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Neue Zürcher Zeitung - Switzerland

The rating agencies are the last means for limiting public debt in Europe, writes the liberal-conservative daily Neue Zürcher Zeitung: "The best thing would be to swiftly reduce debt and raise competitiveness by lowering unit labour costs. ... But that could be difficult, above all in the European sphere. First of all the massive pressure to economise results in a vicious circle due to the economic downturn, and consequently to redoubled pressure to economise. Secondly politicians are torn between two groups of voters: the taxpayers on the one hand and state welfare recipients on the other. Further borrowing is often seen as a way to avoid inflicting too much pain on either group. But that path is increasingly barred, thanks above all to the rating agencies and the financial markets. These are currently one of the last remaining powerful correctives to help us finally adopt a sound economic course." (16/01/2012)

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Il Sole 24 Ore - Italy

After the downgrading of the credit standing of nine Eurozone countries the European Financial Stability Facility (EFSF) also faces the loss of its top rating. Only the European Central Bank can save the situation now, the business paper Il Sole 24 Ore writes: "Clear signals from Europe are required to overcome the crisis. One can neither rely on the instruments of the rescue funds - whether the EFSF or the ESM - nor the hope that the banks will buy government bonds again because the governments of individual states force them to. The sum in question is simply too high. To restore the investors' confidence and prevent the collapse of the European financial market there is only one option: a stronger and more transparent involvement of the European Central Bank, that means direct help for indebted countries." (16/01/2012)

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Hospodárske noviny - Slovakia

The downgrading of France by rating agency Standard & Poor's gives Germany another massive boost and makes the euro bailout operation even trickier, in the opinion of the liberal business paper Hospodárske noviny: "Germany is the only European country whose rating wasn't downgraded and whose prospects are at the same time estimated to be stable. But not only that: this gives Germany even more political clout. The balance of power in Europe has shifted further against France's interests. This will have repercussions on the political situation there. The loss of France's top grading could mean the end of Sarkozy's dreams of another presidency. His socialist adversary Hollande makes no bones about his criticism of Europe's crisis management. Unity and efficiency in resolving the problems of the Eurozone are now likely to diminish even further." (16/01/2012)

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