European Union (EU) authorities are attempting to “muzzle free speech” in their recent attacks against the rating agencies, according to Ambrose Evans-Pritchard.
Evans-Pritchard, the International Business Editor of The Telegraph, heaped strong criticism on euro zone officials over the latest developments in the European sovereign debt crisis in his latest column.
“Before we all join the chorus of abuse against the robber agencies, let us not lose sight of what is happening in the eurozone,” he wrote. “The EU authorities are attempting to muzzle free opinion, first by threatening Fitch, Moody’s, and S&P with vague retribution, and then by drafting restrictive laws to prevent them from publishing unwelcome messages.”
“It is financial repression, pure and simple,” Evans-Pritchard continued. ”The same will be done to the press in due course. Then to you, dear reader.”
Despite his defense of the rating agencies above, however, he placed a considerable amount of the blame on them as well for contributing to the problems in the first place.
“My gripe against the agencies is not that they are downgrading all these semi-bankrupt states today, but that they totally failed to signal the inherent dangers of EMU a long time ago when the crucial investment decisions were being made. They too were swept up by euro euphoria. They too failed to understand the inherent structure of monetary union, or to spot obvious warning signs as the drama unfolded and the North-South divide became ever-more apparent. They handed out AAAs like confetti.”
More importantly at this point, however, Evans-Pritchard noted that “The EU itself brought this about by declaring war on the very investors needed to finance the vast borrowing needs of the European project. By baying for the blood of bankers and ‘speculators’ (ie pension funds and the like who bought Greek, Portuguese, and Irish debt in good faith), Chancellor Merkel has set off capital flight and raised the spectre of defaults. Her specific demands for ’burden-sharing’by Greece’s private creditors (and therefore Portugal and Ireland next) have changed the landscape. The agencies have no choice at this stage. Their job is signal default risk.”
Moving forward, he contended that “if the EU institutions wish to avoid being held hostage by the robber agencies they should stop using the ratings as a basis for lending collateral at the ECB. They should create their own more rigorous method of assessing credit-worthiness, ignore the agencies altogether, and make their case directly to global investors.”
What the EU should not do is try to muzzle free opinion, or free speech,” he concluded. ”We are on a slippery slope.”
Canaco’s Director of Project Development Receives Awards
* The medal is based on whole-of-career accomplishments, including research and student mentorship, success in exploration or mining, and service to SGA and other organizations.
* Dr. Groves has published widely in international journals, mentored and supervised innumerable postgraduate students, and was instrumental in Canaco's discovery and success at its Handeni and Harvest exploration projects in Africa.
* Dr. Groves has also been bestowed the Penrose Gold Medal from SEG, the highest honor bestowed on a geologist; he will be the first person to be awarded both the SEG Penrose Gold Medal and the SGA-Newmont Gold Medal.
