The rating agencies unleash the beast. Moody?s began by lowering its rating of our Portuguese neighbors by four grades to junk bond status. We understand that whether Portugal is investment grade or not is questionable, but the new government has started out on a good foot, taking measures as difficult and responsible as appropriating have of the bonus payments of all its citizens.
It seems hardly sensible to punish them this way just when they are starting to go in the right direction. What´s the big hurry? Perhaps it wants to fix everything that was slowed up by Lehman? If a ratings agency lives by its reputation, these lurches to and fro do not help.
But things don´t rest in Portugal alone. The entire European banking system has also been influenced, and some Spanish banks are among them.
Fitch lowered Popular and Bankinter notes, and Moody´s put Bankia among the worst firms. Such a rain of whips makes European authorities protest because it is a sure sign of favoritism.
There are others acting out in a class where not everyone is punished the same. It is true that the United States and the United Kingdom are preparing their money for inflation and to reduce their debt, but they are not cutting their deficit such as the European peripheral countries. The British also would deserve a knock of attention. And this shouldn´t divert us from the fact that we aren´t fulfilling our duties.
The German and French banks are still discussing what to do with Greek bonds. Until big reductions of Greek bonds are not accepted, we will be banging our heads against the wall.
Translated and Edited in English by Brandon Dyches and Jose L. De Haro
