You bastards (English version)
Shock. Scandal. Junk. Acceptance? No… But yes, junk, we’re junk. The markets have become a fairground, and we’re the scales of their remains. This is not an emotional reaction. Nor is it retaliation to humiliation. These are the facts. The arguments. Moody’s isn’t right. Moody’s isn’t rightful. Moody’s doesn’t give a damn. Moody’s treaded us. And Europe caved in.
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The reasons for a rate cut are now absurd: the challenge of reducing the fiscal deficit, the need for more money and the troublesome return to the financial markets in 2013 are topics being addressed by the government. By the Country. This rating cut doesn’t identify these challenges, it precipitates them. Portugal is absent from the markets, it deserved some time to dissociate itself from Greece. Six months, a year.
Portugal was a mad MAN, he threw himself into a cliff and now clings to a rope that was thrown in his direction. He’s trying to hold on with all its strength, lucid and humble in the way only those in ruin are lucid and humble. Then came Moody’s, spitting to the side and saying climbing the rope is tough – thus cutting the rope.
This is not about Portugal, it’s a matter of war between the US and Europe, it’s about profits for private investors in the shadow of ratings agencies. Two weeks ago, an outstanding piece by the journalist Cristina Ferreira, at newspaper “Público”, illustrated that corrosion. Another journalist, Myret Zaki, wrote the remarkable book “La fin du Dollar”, which documents the “system” on which these agencies thrive and the underlying euro-dollar tug of war.
Yesterday, Angela Merkel condemned the power of rating agencies and promised to fight back. In less than 24 hours came the response: S&P’s warning that the Greek debt roll over will be considered a selective default; and Moody’s rating cut on Portugal.
We’re in the middle of a scam and the European Union is impotent. Four years after the crisis that these agencies allowed, Europe has been unable to put out a recommendation, a threat, an European rating agency. What has China done? They created their own rating agency. What does that rating agency say? That Portugal is BBB+. That US debt is no longer triple-A. The Chinese have power and courage, Europe has hung itself in the American bargain-price shop.
The troika is worried about the lack of corporate competition in Portugal… What about competition in rating agencies? Two days ago, Stuart Holland put forward, along with Portuguese former Presidents Mario Soares and Jorge Sampaio, the proposition for an European “New Deal”. He told this newspaper “we need government governing instead of rating agencies ruling”.
We’re not asking for pity, we want fairness. Europe crosses its arms. Let us not do the same. The European Central Bank must stand up against to this despotism. In October, a report by the Financial Stability Board, led by Mario Draghi, advised private banks and the central banks to build their own models for assessing the eligibility of financial instruments, putting a stop to the mechanical evaluations made by rating agencies. Draghi will soon become chairman of the ECB’s governing council. He doesn’t need to terminate rating agencies, he needs to rise up in look into their eyes.
This rating cut is serious. It’s uncalled for, and it will cost us. Portugal is now Europe’s junk. Rating agencies are the undertakers, wealthy and euphoric, of a ridiculously impregnable system. The agencies assure us they don’t hold anything against Portugal. As the man said, “it’s nothing personal, it’s strictly business”. That man was a mob boss.
This article is the English version of today's Editorial of Portugueses daily newspaper Jornal de Negócios. Pedro Santos Guerreiro is it's Editor-in-Chief. To read the Portuguese originial article, go to this link.