While things seemed settled with the ‘rollover’ of Greek maturing bonds, here we go again, starting the discussion from point zero. The French proposal was slammed by rating agency Standard & Poor’s as “selective default”, while Moody’s remained tight-lipped so far. The vehement denial of Greek rollover by S&P gave a strong kick in the rears of the politicians in Brussels and the rest of the United Europe. They took a step back. Germany, assisted and supported by Austria and Finland, mumbled and grumbled , and they postponed the relevant decision until the autumn.
Germany rushed to bow to S&P’s dictate forcing Martin Kotthaus to say that “the model under which there will be private sector involvement remains open. We have to look carefully to see what model we can find to have as few side effects as possible.” Kotthaus is the Spokesperson of the Permanent Representation of the Federal Republic of Germany to the European Union in Brussels.
The euphoria about the Eurogroup decision to release the 5th loan-tranche last Saturday, evaporated within minutes and formed a new cloud of uncertainty.
What we learn from this lesson? That no matter how hard the European leaders will try to take a decision and show political will, they prove that the Euro kings and queens have no clothes on. The royalty of Europe stands there not only naked but bowed and revealing their double identity card. That they are loyal servants of the ratings agencies. Because they simply have no plan.
Read here an enlighting article by Financial Times : Q&A: Greek rollover & ratings agencies.