Ratings agencies are in danger of themselves worsening the euro zone debt crisis, European Central Bank policy maker Christian Noyer said on Tuesday after Standard & Poor’s threatened a mass downgrade of euro zone governments.
S&P said late on Monday, after a Franco-German push for treaty change to tighten fiscal governance in the euro zone, that it could hit the 17-member bloc with a mass downgrade if there was no convincing deal at an EU summit on Friday.
Mr. Noyer, the head of the Bank of France and a member of the ECB’s governing council said the agency’s methods for assessing governments’ creditworthiness had become increasingly political.
“The agencies were one of the motors of the crisis in 2008. Are they becoming a motor in the current crisis? That’s a real question we all need to think about,” he told a conference on corporate finance in Paris.
On Tuesday, the French government said it would take a warning that its triple-A rating could be cut by two notches but it does not see the need for further budget cuts or expect difficulties issuing debt next year.
“When you look at the way S&P formulated its argument, you can see that they have changed their methods. The methodology has become much more political and less linked to economic fundamentals,” added Mr. Noyer, who is also government of the Bank of France.