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A call for a European credit rating agency

December 8th, 2011

Népszabadság and Magyar Nemzet call in unison for the establishment of a European credit rating agency. The two biggest Hungarian dailies agree that American credit rating agencies are trying to pressurize EU countries to reach an overall agreement this week, but at the same time play an important role in the economic war between the EU and the US.

Standard & Poor’s warned late Monday that it might downgrade 15 countries that use the Euro, including Germany, which has a perfect AAA rating and is Europe’s strongest economy. On Tuesday, S&P said it might also cut the AAA rating of Europe’s bailout fund. Moody’s Investors Service downgraded Hungary’s sovereign rating by one notch to Ba1 from Baa3, taking it below “investor grade” at the end of November. This came soon after Standard and Poor’s postponed a rating decision on Hungary until “most likely before the end of February 2012″, because of a possible agreement with the International Monetary Fund and the European Union. (BudaPost, November 28).

Magyar Nemzet believes that both Standard & Poor’s and Moody’s issued their statements to influence Hungary’s behaviour towards a visiting IMF delegation. Columnist Anna Szabó reminds readers that the Hungarian opposition immediately called for Minister of Economy György Matolcsy to resign.

“According to this logic, we should say Abzug to Merkel and Adieu to Sarkozy (…) and the whole Eurozone should immediately express its collective shame,” – concludes Magyar Nemzet, adding that “this is the big boys’ game now.”

Anna Szabó believes that the American credit rating agencies are trying to strengthen the American economy by deliberately weakening the European. What is at stake is who will survive the recession with the smallest losses.

“This is both an economic and a ratings war,” – Magyar Nemzet believes, and stresses that the downgrading of Hungary was just one skirmish in a much larger campaign, as the country is “one of the most indebted member states.”

Anna Szabó calls for the EU to ban country ratings and to establish a European credit rating agency.

Népszabadság has a very similar approach. The daily believes that S&P wants to pressurize European leaders to reach an overall agreement instead of striking smaller bargains. “Europe is implementing reforms and painful measures but no one seems willing to honour this endeavour,” – writes Edit Inotai, who also mentions that S&P’s announcement was leaked prematurely, which made speculation against the Euro possible in America. The same had happened when S&P downgraded the US and in the case of its false alarm on France.

In contrast with Magyar Nemzet, however, Népszabadság reminds its readers that neither German nor French politicians began drawing up elaborate conspiracy theories, but announced instead that they are ready to do everything necessary to regain the confidence of the markets.

Like Magyar Nemzet, Népszabadság believes that a real solution would be the establishment of a European credit rating agency, which could balance the verdicts delivered by the Americans. “But this is still only a dream,” – the left-wing daily concludes.

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