EU politicians criticize the rating agency S & P vigorously for their decision to demote a number of euro area countries. This step is justified, however, believes the chief economist of Deutsche Bank's Mayer. Investors are likely to be the verdict of the rating agencies but not slavishly bow.
tagesschau.de: With France, Italy and Spain, €-graded countries have initiated major reforms. You now have a lower credit rating than it was before their consolidation process. Why is that?
Thomas Mayer: On the one hand, the rating agencies act with time delay. You are lagging behind with their assessments of developments. Secondly, one must look to the grounds. Standard & Poor's complained about the inconsistency within the European Union in addressing the crisis. According to the analysts is available at EU level there is no effective crisis management.
Mayer: We have in the past two years seen in the fact that the EU is not finished with this crisis. It has long underestimated the problems and is running behind the developments. The criticism is justified.
tagesschau.de: Nevertheless, you can hear the accusation that the rating agencies are biased. There were a "political rating." This impression is deceptive?
Mayer: The accused is charged very quickly. I would be careful. The downgrade is understandable. The criticism of the EU crisis management can be justified.The politicians, who complain that the demotion was politically motivated to actually divert attention from the problems for which the policy is responsible.
"The growing concern about the viability of the euro"
tagesschau.de: Italy and Spain are now at the same level of assessment such as the Bahamas, Colombia and India. Is that really fair?
Mayer: You have to consider that a country that is in a monetary union, has no access to their own printing press. The ECB may, by statute neither Italy nor Greece and Spain to free money by printing before a bankruptcy. In this respect, the risks of default is greater than in countries with their own currency.
tagesschau.de: What impact will the downgrade to the affected countries?
Mayer: In the short term, the downgrade has no major impact. The market - we see this in the stock market - has already anticipated this step. The decision was not surprising, it has long been speculated. Medium term, though there is increasing concern about the viability of the euro zone. And the verdict of Standard & Poor's, the debate over the EFSF will fuel new.
tagesschau.de: Will the euro rescue more difficult?
Mayer: It is much more difficult. Because with the downgrading of the nine countries is just € EFSF even when the basis for the top AAA rating had shrunk considerably. A downgrade is likely. In addition, many investors uncertain about the debate further leverage the EFSF. And then there is a large issuance of the bailout, Greece by the program must be financed. All this makes investors skeptical and means headwinds in financial markets.
tagesschau.de: With France, Italy and Spain, €-graded countries have initiated major reforms. You now have a lower credit rating than it was before their consolidation process. Why is that?
Thomas Mayer: On the one hand, the rating agencies act with time delay. You are lagging behind with their assessments of developments. Secondly, one must look to the grounds. Standard & Poor's complained about the inconsistency within the European Union in addressing the crisis. According to the analysts is available at EU level there is no effective crisis management.
Mayer: We have in the past two years seen in the fact that the EU is not finished with this crisis. It has long underestimated the problems and is running behind the developments. The criticism is justified.
tagesschau.de: Nevertheless, you can hear the accusation that the rating agencies are biased. There were a "political rating." This impression is deceptive?
Mayer: The accused is charged very quickly. I would be careful. The downgrade is understandable. The criticism of the EU crisis management can be justified.The politicians, who complain that the demotion was politically motivated to actually divert attention from the problems for which the policy is responsible.
"The growing concern about the viability of the euro"
tagesschau.de: Italy and Spain are now at the same level of assessment such as the Bahamas, Colombia and India. Is that really fair?
Mayer: You have to consider that a country that is in a monetary union, has no access to their own printing press. The ECB may, by statute neither Italy nor Greece and Spain to free money by printing before a bankruptcy. In this respect, the risks of default is greater than in countries with their own currency.
tagesschau.de: What impact will the downgrade to the affected countries?
Mayer: In the short term, the downgrade has no major impact. The market - we see this in the stock market - has already anticipated this step. The decision was not surprising, it has long been speculated. Medium term, though there is increasing concern about the viability of the euro zone. And the verdict of Standard & Poor's, the debate over the EFSF will fuel new.
tagesschau.de: Will the euro rescue more difficult?
Mayer: It is much more difficult. Because with the downgrading of the nine countries is just € EFSF even when the basis for the top AAA rating had shrunk considerably. A downgrade is likely. In addition, many investors uncertain about the debate further leverage the EFSF. And then there is a large issuance of the bailout, Greece by the program must be financed. All this makes investors skeptical and means headwinds in financial markets.
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