‘Shooting the messenger’ is a time-honored European tradition....
The market will rate the countries debt whether the EU bans rating agencies from downgrading or not. In fact, the law of unintended consequences would indicate that the moment the EU bans Moodys, S&P, Fitch, etc, from downgrading a particular countries credit rating, the interest rate on that countries debt will skyrocket.
If the rating agency downgrades one of two notches, the credit markets give the proper weight to that move. If the EU bans the credit agencies from downgrading, the uncertainty of how bad the situation is will cause the market to fear the worst and make the jump in rates even higher than they would ordinarily be after a downgrade.
Divine
Right?
This tactic is almost as smooth as reducing fuel use while flying in mountainous areas by ignoring the Field Elevations.
Bet it took a couple of months’ worth of high-powered meetings to arrive at this jewel of blithering idiocy.