ECONOMY

Europeans rage against role of ratings agencies

European politicians accused credit rating agencies on Wednesday of anti-European bias after Moody’s downgrade of Portugal’s debt to «junk» cast new doubt on EU efforts to rescue distressed eurozone states without debt restructuring.

European Commission President Jose Manuel Barroso said the decision to cut Lisbon’s rating by four notches so soon after it became the third country to receive an EU/IMF bailout was fuelling speculation in financial markets.

The cost of insuring all weaker euro zone states’ debt against default rose after Moody’s move, announced on Tuesday.

The euro and European shares fell, ending a seven-day stocks rally, and Portugal had to pay more to sell 3-month T-bills on Wednesday.

“It seems strange that there is not a single rating agency coming from Europe. It shows there may be some bias in the markets when it comes to the evaluation of the specific issues of Europe,» Barroso told reporters in the European Parliament.

German Finance Minister Wolfgang Schaeuble called for limits to be placed on the rating agencies’ «oligopoly».

Greek Foreign Minister Stavros Lambrinidis attacked on Wednesday what he termed the ?madness? of ratings agencies in the European debt crisis, saying they exacerbated an already difficult situation.

He told a conference in Berlin that the decision by Moody?s agency late on Tuesday to downgrade Portuguese debt to speculative status was not based on any failure to implement economic reforms.

The downgrading reflected rather ?the assumption that Portugal would need a second bailout.? Lambrinidis said that this had ?the wonderful madness of self-fulfilling prophecy? by aggravating Portugal?s fiscal straits.

Of the three major agencies, Moody’s and Standard